STOCK MARKET Resources

The Weekly Report For August 23rd - August 27th, 2010

2010-08-23T00:00:00-04:00

Commentary: It was a volatile week on Wall Street; the markets started out strong, gave it all back and then ultimately finishing close to where they started. The week began with a bounce that carried into Wednesday before a sell off on Thursday that spilled over into Friday. After breaking down to new August lows on most of the major indexes, the markets finished the week with some late-day buying that erased most of Friday's declines. In the end, the markets did little to clear up the picture and left traders wondering whether they are close to breaking down or providing a buying opportunity.

IN PICTURES: 7 Tools Of The Trade

The S&P 500, as represented by the S&P 500 SPDRS (NYSE:SPY) ETF, remains in an interesting position in which two scenarios are developing that are at polar odds with each other. The first is the idea that a very large head-and-shoulders top has been forming over the past year and that the markets are getting ready to embark on a new down leg that could end up heading to much lower levels. This scenario would become much more plausible on a break of the July lows.

The second scenario, which is occurring on a much shorter time frame, is the idea that a tradable low is forming in this area and that the markets are simply consolidating the 2009 rally. The price action that began in late May through the present time is also taking on the shape of an inverse head and shoulders and is in direct conflict with the idea that a much larger topping pattern is close to completion. The neckline for this pattern is near $113 and a break above this level would solidify the odds that this scenario will occur. The markets could really head in either direction at this point, and traders need to be patient as the move could be explosive in either direction.

Source: StockCharts.com

The price action in the Diamonds Trust, Series 1 (NYSE:DIA) ETF, which tracks the Dow Jones Industrial Average, is presenting a very similar pattern on longer time frames, although the shorter time frames are revealing more strength. DIA set a higher high earlier this month, which was an important milestone, but the quick failure at this level is calling that accomplishment into question. DIA remained in a pattern of higher highs and higher lows over the past few weeks and only a close below the $100 level will break this pattern. This will be the first level to watch in the near term, at which point the July lows near $95 could be the bottom of a much larger base.

Source: StockCharts.com

The Powershares QQQ ETF (Nasdaq:QQQQ) actually showed a little strength this week by holding above last week's lows. This was the only one of the major index ETFs that managed this feat, and it could be giving bulls a glimmer of hope that the markets will hold these levels. It’s always a positive thing when leadership comes from the tech stocks and QQQQ has been showing relative weakness recently. The picture still looks weak overall, and QQQQ will need to clear its August high near $47 before the picture can truly turn more positive.

Source: StockCharts.com

The Russell 2000, as represented by the iShares Russell 2000 Index (NYSE:IWM), is the other index that bulls would like to see assume a leadership role. Unfortunately, IWM continues to lag the markets. IWM is the only index currently testing its mid-July pivot low near $60, although Friday's close revealed some buyers waiting at this level. Critical support remains near $58 and a break below this level will be the place where many participants will throw in the towel.

Source: StockCharts.com

The Bottom Line
The markets are truly in a position where a large move can occur in either direction. There are many mixed signals as well, making it even more difficult to get a read on price action. Traders need to remain patient and keep a watchful eye on some clearly defined levels. Just beneath current price action is a clearly defined support level that has held over the past year. Just above price action is a price level that has acted as resistance over the past two months. Clearing either of these two ranges will begin to stack the odds in a trader's favor, but until then, traders are probably better served relaxing as the summer winds down.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Have a Great Day!

By Joey Fundora

Joey Fundora is an independent trader located in South Florida. Joey focuses on using technical analysis techniques to uncover supply and demand imbalances in equities. To see more of his work, visit his site on Stock Chart Analysis.

At the time of writing Joey Fundora did not own shares in any of the companies mentioned in this article.

DISCLAIMER
ChartAdvisor is not a registered Investment Adviser or a Broker/Dealer. The trading of securities may not be suitable for all potential users of the Service. You should be aware of the risks inherent in the stock market. Past performance does not guarantee or imply future success. You cannot assume that profits or gains will be realized. The purchase of securities discussed by the Service may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities, or making any investment decisions. You assume the entire cost and risk of any investing and/or trading you choose to undertake.

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

The world is getting crowded

2010-08-06T00:00:00-04:00

Farmers will need to grow more food in the next 50 years than they did in the previous 10,000 years combined. Why?

Because the world’s population is skyrocketing. Every second of every day, five people are born and two die. The result is like populating a new city the size of Los Angeles every two weeks.

Read on to find out how we can target gains of 90% or more from this trend.

The world is getting crowded

We’re not guessing at the numbers. We know how many people are alive today. And we know the average birth rates and death rates of every country.

Here’s what the population growth chart looks like:

The latest studies show world population will reach 7 billion next year. Just 12 years after we reached 6 billion. When will we hit 8 billion? Probably by 2024, but it might be sooner.

The population explosion is one of the powerful long-term trends we’ve identified in Sound Profits.

More mouths to feed

A growing population means the world needs to grow more food.

But there’s a problem. The world doesn’t have unlimited acreage for crops. In fact, the amount of arable land is actually declining.

China, for example, has 20% of the world’s people. But only 7% of the world’s arable land. It has been losing 1,400 square miles of farmland to the desert every year. And large tracts have been lost to industrialization.

Not only that but developing countries are getting wealthier. And when people get wealthier, they tend to consume more protein. Higher meat consumption puts additional pressure on grain supplies.

This powerful macro trend of a growing, increasingly wealthy world population and the effect it has on the global food supply is here to stay. And you can profit from it.

How to play a hungrier world for big gains

The simplest way to invest in this trend is with a grain ETF. That gives you direct exposure to the global food supply. The iPath DJ-AIG Grains Sub-Index Total Return ETN (JJG) is a good choice. Its portfolio is unleveraged. It reflects returns available on futures contracts in three grains. Currently, the mix is 40% soybeans, 35% corn, and 24% wheat.

As of June 30th, JJG was down 17%. But since July 1st, it has moved from $33.78 to $37.25, breaking out of its 50-day moving average.

And as you can see from the following chart, JJG is miles below its June 2008 high of $74.00. A move back to its high would give investors today a gain of more than 90%.

Are you worried about reckless government stimulus programs – and not just here in the U.S.? Owning grains is a decent inflation hedge.

Hungrier world play #2

As I said, the world doesn’t have an endless supply of arable land. And a growing and wealthier population means we need to make the land devoted to agriculture more productive. One way to do that is with better seed technology.

In Sound Profits, we’ve identified a leader in genetically modified seeds. Its stock is trading at a big discount to its 2008 high. We think fair value for this stock is 80% higher than it is today.

Hungrier world play #3

Yet another way to play this powerful long-term trend is to buy companies that produce fertilizer.

Typically, these aren’t stocks you want to buy and hold, because their prices can be so volatile. Our own Steve MacDonald has been in and out of a major fertilizer producer three times in the past year. And Sound Profits readers have racked up big profits following Steve’s advice. I urge you to subscribe and take advantage of this stock’s next big move.

And by subscribing right now, you can get my free report on another commodity – one that’s poised to pay you 10-14 times more than gold. That’s right. 10 to 14 times more than gold. For details, click here.

Source : feedback@investorsdailyedge.com

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Bullish Measured Move Chart Pattern

2010-07-26T00:00:00-04:00

Bullish measured move or measured move up is a continuation chart pattern which starts as a reversal pattern. This is a three phased formation which forms over several months. The 3 phases of bullish measured move are reversal advance phase, consolidation/correction phase and continuation advance phase.

The requirements of a bullish measured chart pattern include,

The pattern should form at the end of a strong downtrend.
The reversal advance phase starts near an established low and lasts for a few weeks to many months. The upward price increase should be orderly; usually forming a price channel. If this uptrend is greatly curved, then the validity of the pattern is greatly challenged.
The consolidation/correction phase occurs after an extended uptrend. The correction can be up to 63% of the reversal advance. Consolidation patterns such as rectangle chart pattern and ascending triangle or correction patterns such as falling wedge or sloping flag formations should occur at the end of this phase.
The continuation advance phase usually matches the slope of the first phase.
The volume should increase at the beginning of both advance phases and should decrease at the end of the consolidation phase.

With bullish measured move, traders can go long at the confirmation of breakout of consolidation/correction phase. Traders should use appropriate price target suiting the continuation pattern at the end of the consolidation phase.

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Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Bearish Measured Move Pattern

2010-07-26T00:00:00-04:00

Bearish measured move or measured move down is a three phased continuation chart pattern. The pattern starts as reversal of an existing uptrend but is considered as continuation pattern as the pattern is only confirmed after the second phase. The 3 phases of bearish measured move are reversal decline phase, consolidation/retracement phase and continuation decline phase.

The requirements of bearish measured move pattern include,

The pattern should begin at the top/end of a strong uptrend.
The reversal decline phase starts near a high. The downward price decline should be pretty orderly; usually breaking a major support and forming a price channel. This phase lasts from a few weeks to many months. If the price is greatly curved, then the validity of the pattern is challenged.
The consolidation/retracement phase follows the first phase. If it is a price retracement, it can be up to 67% of the first phase. Consolidation patterns such as rectangle chart pattern and descending triangle or retracement patterns such as rising wedge, bearish flag and bearish pennant formations should occur at the end of this phase.
The continuation decline phase should (almost) match the slope of the first phase.
Volume confirmation is no so important. Generally, the volume should increase at the beginning of both decline phases and should decrease at the end of the retracement phase.

With bearish measured move pattern, traders can go short at the confirmation of breakout of consolidation/retracement phase. Traders should use appropriate price target suiting the continuation pattern at the end of the consolidation phase.

NobleTrading.com Offers Online Stock Trading, Online Options Trading,
Online Futures Trading, Online Forex Trading
Worldwide Brokerage Service, Day Trading Brokerage

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Stock Trader - Knowing When to Trade and When to Hold

2010-07-21T00:00:00-04:00

Most people don't think of themselves as an independent stock trader. Although they may be purchasing stocks on their own through an online broker and making decisions about which securities are the most likely to perform well and provide an opportunity for making a profit, they probably just think of themselves as dabbling in the stock market. When you've invested your money in the stock market, it's important to realize that you are no less important than the professional brokers and traders that are responsible for million dollar trades. And just like those professional traders, you've got to find reliable methods for knowing when to trade and when to hold on to what you've got.

As a stock trader, one of the most important things you've got to become comfortable with is the fact that the market is going to change, and it's not always going to be in your favor. Sometimes a stock that you hoped would break out of its current price range will plunge instead, and that unexpected move could cost you a lot of money if you're not cautious about how you invest in the first place. New investors should always have goals and limits in place before they invest in a stock, and know how to walk away if the process starts to get more costly.

Another important skill you should seek as a stock trader is the ability to interpret the fluctuations of the market, not only as natural processes, but also as clues that can tell you whether to hold or whether to trade long in advance. Many investors use elements of technical analysis to guide their stock market trading, as it is a well developed method for tracking stock price fluctuations and using them to help you predict the way stock prices are going to behave in the future.

While you're working on your knowledge of technical analysis, it's also important not to forget that to the stock trader, there is never anything as useful as purposeful research. This means that in addition to examining past stock prices for a certain company, you should also investigate the people running the company, the financial stability of their operations, and assess the public demand for their products and services. All these factors can exert pressure on the market, causing prices to rise or fall. The more you know in advance, the more prepared you'll be for the changes that are coming.

If you're interested in learning more about Stock Trader or you looking for Stock Picks ready to breakout, go to Stock Market Video the best source on the Internet that is recognized as the leading provider. Visit http://stockmarketvideo.com and get your FREE Daily Video!

Article Source: http://EzineArticles.com/?expert=Aaron_Livingston

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Big Oil's New Bully

2010-07-10T00:00:00-04:00

BP’s horrific oil spill in the Gulf of Mexico as generated a lot of hyperbole. No, it doesn’t spell the end of oil’s reign. And, no, it’s not offshore oil’s Three Mile Island. Offshore oil drilling will proceed (but admittedly with much higher costs). And, no, it shouldn’t even cause the demise of BP.

But the Deepwater Horizon accident has produced a clear winner and a clear loser. And that’s something investors should pounce on. Because it opens the door for one particular company to emerge as the new bully among oil giants.

From “Drill, Baby, Drill” to “Stop the Madness”

Tina says, “We should hold off on exploring in some of the deeper basins.”

Who is Tina? Somebody we should listen to. Not because she’s right or she has the ear of the Obama administration. Tina isn’t even from America. She’s an assistant law professor at a university halfway across the world in Australia.

But in the post-Deepwater Horizon era, when she says “The last thing we need is to go into deeper waters and risk something like what happened in the U.S.,” you’d better believe that she’s speaking for dozens of governments. Here are just a few examples...

Bulgaria is dropping plans for a new oil pipeline.
French oil giants are upgrading equipment and procedures designed to prevent spills.
Canada’s offshore regulator is tightening oversight of its deepest-ever exploration well (being drilled by Chevron).
Norway is stopping deepwater drilling until the causes of the deepwater explosion in the Gulf of Mexico are better understood.
Russia is formulating new and tighter rules.

And Australia is leaning toward scrapping its latest set of drilling permits and putting deepwater exploration drilling on hold.

The Biggest Loser

It’s not oil. If anything, all these reviews and moratoriums and stricter regulations will cut into supply in the short term, thereby raising crude prices.

It’s the Gulf of Mexico.

It was meant to be the new and lucrative frontier not just for BP but for all the other global oil majors too.

That Gulf no longer exists. Let’s face it, the Gulf of Mexico will never be the same. And I’m not talking about the washed-up oil. That will eventually clear up. But from now on, every development plan for the Gulf will be scrutinized over and over, with many new hoops for oil companies to jump through, and plenty of backup safety equipment and plans built into their operations.

I guess there’s always Cuba. It has 59 blocks in its portion of the Gulf. (Only 17 have been contracted out so far.) But even Cuba is going to be affected by the onslaught of new drilling regulations that the U.S. will be putting in place.

Don’t look now but the oil majors have already found their new offshore frontier. And it couldn’t be further away from the prying eyes of the U.S. government.

BP’s Plan B

A couple of weeks ago, BP, along with Chevron, bought the rights to a big offshore block. It’s in the South China Sea.

Did you really think that BP or the other oil companies were going to stop looking for deep-sea oil? All the big onshore oil discoveries have come and gone. But the underwater discoveries have just begun. And the South China Sea is now a prime exploration target.

Back in 2006, Husky Energy discovered 4-6 trillion cubic feet of recoverable gas reserves in the South China Sea.

Husky is going to make a lot of money from those gas reserves. But another company, CNOOC, rules the roost. CNOOC is China’s state-owned oil company, and the South China Sea is one of its major production areas.

CNOOC bought a big stake in the South China Sea one week before BP/Chevron’s purchase. And if BP and Chevron strike it big? CNOOC gets 51% of it.

How so? CNOOC has the exclusive rights to develop China’s offshore resources – and, UNDER CHINESE LAW, has the right to take a 51% stake in any discoveries made by foreign companies.

CNOOC posted these comments on its website on June 10th...

Offshore and especially deep-water oil and gas discoveries have great significance for replenishing China’s and the world’s oil resources. We can’t cancel or stop deep-water oil and gas extraction because of the accident in the Gulf of Mexico.

Why would CNOOC want to stop deepwater exploration in the South China Sea? What happened in the Gulf of Mexico is terrible, but CNOOC can’t undo it. The company understands all too well that the Gulf accident will be driving even more companies into its territory, where it enjoys the huge competitive advantages bestowed upon it by the Chinese government. The South China Sea is the next big deepwater drilling destination. BP, Chevron, Exxon Mobile, and Shell... Welcome to CNOOC’s world.

By the way, CNOOC is up 36% in my Sound Profits portfolio in less than a year. In light of recent events, I’m convinced it’s going much higher.

Article Source : investorsdailyedge.com

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

5 Interesting Facts About Stock Options

2010-06-21T00:00:00-04:00

When people refer to options trading they could actually be referring to a number of different securities. Options are traded on all types of securities (forex, commodities, stocks, etc.), but for the purpose of this article I will only be referring to stock options.

Here are 5 interesting facts about options trading that most traders never realize:

Fact 1: Most people never know who actually creates stock options. Heck, I traded for years before I found out the Options Clearing Corporation (OCC) issues all listed options at the CBOE as well as other U.S. option exchanges.

The OCC ensures the options market stays liquid and that there is always a buyer and seller for every transaction. Another party that helps facilitate this liquidity are Market Makers.

Fact 2: Sometimes it's not another options trader who buys or sells your stock option from/to you. Market Makers are exchange members who help keep the market liquid by using their own money to buy and sell options.

So when there is an absence of public buy and sell orders the Market Makers step in and put up their own capital to ensure the trade can be executed.

Fact 3: The price options are quoted at is their per share price, but they are only actually sold in 100 share batches. So what that means is that whatever price you see quoted has to be multiplied by 100 to get the true cost of that option.

People who are unaware of how stock options work may look at a quoted price of $2 and then get excited thinking they can buy that stock option for $2 when in all actuality it will cost them $200.

Fact 4: Stock options do NOT expire the third Friday of the month of their expiration. They actually expire the third Saturday of the month of expiration, but for trading purposes people usually state that they expire on Friday (since the market is not open on Saturday).

Fact 5: When you purchase a stock option you're not purchasing ownership in anything like you are with stocks. The only thing you are purchasing is a contract that grants you certain "rights".

In the case of a Call option you are purchasing the "right" to buy a stock and with Put options you are purchasing the "right" to sell a stock.

Options trading can be confusing at first, but take your time, keep learning and eventually things will start to come together.

But if none of this makes sense just follow the link to the resource below for a more in depth explanation on stock options trading.

For further reading you can learn how with options trading a small sum of money can be multiplied into a larger sum of money rather quickly. Check out http://www.learn-stock-options-trading.com/options-trading-leverage.html.

Or you can learn some more interesting facts about online options trading.

Article Source: http://EzineArticles.com/?expert=Travis_W

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Can BP pull an Exxon

2010-06-16T00:00:00-04:00

Unless you've been hiding in a cave somewhere, you know about the largest oil spill in U.S. history which was triggered when the Deepwater Horizon drilling rig suffered massive failure and subsequently sank, causing oil to begin gushing into the Gulf of Mexico.

Many of us also remember the Exxon-Valdez spill of 1989 which, until recently, was considered the worst in U.S. controlled waters and an environmental disaster. In the years since this tragedy in the remote waters off the Alaskan coast, Exxon has made a full recovery, including a 1999 merger with Mobil which made ExxonMobil one of the largest publicly traded companies in the last few years.

There are many differences between the Exxon spill and the recent BP spill, namely the proximity to the continental United States and its thriving coast along the Gulf of Mexico, so the question we pose to our Trader's Blog readers is, is it a great time to invest in BP stock and hold out for its recovery, or is a short position the only one to consider when talking about this market?

June 15, 2010 · By Susan

Vote and Comments on the above blog link site http://club.ino.com/trading/2010/06/can-bp-pull-an-exxon/

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Penny Stocks on the Rise

2010-06-10T00:00:00-04:00

How to Find Winners and Eliminate the Losers

Everyone wants to know which penny stocks are on the rise. Well, you can do two things. You can trust somebody's advice on which stock will be a winner, or you can do one thing that 90% of investors skip and find out for yourself.

When you trust other people, they can be wrong. This means you are throwing money to chance when investing bases on someone else's word.

We want to reduce the risk as much as possible.

Reduce Risk with one Tool That Others Forget

The key to know yourself if a stock has a good chance of making you money or causing you to go broke is research. Research scare many people because they think it is impossible to do unless you have tons of knowledge and years of experience.

That cannot be father from the truth! Research is not very hard and anybody can do it!

Here are the Three Things You Must Research

- Who is the CEO of the company? Have they worked for any other companies? If so, how good did they do?

- What are the long term and short term goals of the company?

- How is the overall industry that the company is involved in doing? Is it on an upward turn.

If all of these factors are favorable, then you know for a fact that the company you are looking at has a great chance to go up in price. So before you simply trust your money in the word of another person, take a little time to make sure your stock will be a winner yourself!

If you find research to be a little confusing, you can find some awesome tools and resources here: Stock Research Tools

What a Difference it Can Make

Just taking a little time can make a huge difference in your investing success! So start researching and I know you will be very please with your portfolio in the coming months! http://www.pennystocksmadeeasy.com

Article Source: http://EzineArticles.com/?expert=Michael_Pergrem

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Inflation Can be Your Friend

2010-06-04T00:00:00-04:00

You don’t have to look any further than television commercials to see that people are worried about inflation. Denny’s restaurants begin their most recent commercial with the following bit of wry humor:

"I went into one of those dollar stores the other day to buy a pencil. And guess how much it cost? Two dollars. I’m no math whiz, but it seems to me that money doesn’t go as far as it used to."

Is your money going as far as it used to?

Our Inflationary Future

The problem with the dollar and the Euro is that there are too many of them. Make no mistake about it. An increase in money supply eventually raises prices. And leads to inflation. Every new dollar or Euro created dilutes the purchasing power of all the dollars and Euros already in circulation.

Can inflation be your friend? If you know where to invest, yes. Today, we’ll show you the key to making money in an inflationary environment.

So Where Is the Inflation?

We’ve talked about the coming bout of inflation in IDE ever since the massive government bailout of the banks. So how come the Consumer Price Index (CPI) numbers continue to look so benign?

Inflation has always been a monetary phenomenon. Put another way, inflation is growth in the money supply that exceeds the rate of economic output. And there is no doubt that we’ve got too much money. The Fed’s monetary base has ballooned from $900 billion pre crisis to over $2 trillion.

And on May 2, the European Central Bank (ECB) created an additional 750 billion euros to shore up the banking system.

So where’s the inflation?

The Money Multiplier

A great deal of the money that has been created has yet to find its way into the system. When the Fed pumps money into banks, the banks usually turn right around and lend it out. Through the fractional reserve system, they can lend out up to nine times the amount of their reserves. This increases the velocity of money and expands the money supply.

But the banks aren’t lending the way they did during the last expansion. According to FDIC chief, Sheila Blair, U.S. banks last year registered their steepest decline in lending in the last 67 years. Total outstanding loans plunged by 7.5%.

So all that new money hasn’t created bigger CPI numbers… yet.

But one canary in the coalmine is gold. Inflationary expectations are one reason gold prices are up dramatically. Up 186% in the last five years.

Ditto for silver. Up 150% in the last five years.

The Case for Hard Assets

Gold and silver are both considered hard assets. Hard assets are typically a good inflation hedge. Hard assets also tend to appreciate when stocks and bonds falter. And that’s why they must be part of your portfolio.

There is a fundamental difference between money and hard assets. Hard assets cannot be created on a whim. No one can create more gold or more silver with the stroke of a pen or a decimal point shift on a computer screen. Silver and gold have intrinsic value. There is a limited supply, and demand will ramp up as confidence in paper money erodes. But they’re not the only hard assets you should consider.

Other Hard Asset Plays

Our own Dr. Russell McDougal is bullish on gold and silver. And his subscribers are buying large quantities of these precious metals at a big discount to the above-ground price! How? By investing in the mining companies themselves.

In October of 2008, Rusty recommended San Gold to his subscribers at 81 cents a share. By dividing the stock price by the amount of gold the company had in the ground, Rusty figured they’d be buying the gold for $113 an ounce. Today, San Gold is trading at around $4.50 a share. A gain of over 450%!

But Rusty feels there may be even more upside in Rare Earth Elements. Like gold and silver, they have intrinsic value.

With names like Holmium, Erbium, and Neodymium, the Rare Earth Elements are not easy to remember. But they play a vital role in technology. Supply is constrained. And demand is growing. That means huge profit potential for investors who get in ahead of the curve.

I asked Rusty for an estimate of how much money stands to be made in rare earth mining stocks. He said, “We’re in elephant country. 10 baggers or more are entirely possible."

For more information on this and other hard asset investment opportunities,

https://web-purchases.com/RST/ERSTL602/landing.html?o=111317&s=113103&u=42336630&l=122953&r=Milo

Bob Irish Reporting: Delray Beach, FL

Tuesday June 1, 2010

Article Source: feedback@investorsdailyedge.com

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

The Weekly Report For May 31st - June 4th, 2010

2010-05-31T00:00:00-04:00

Commentary: It has been a hectic couple of weeks and recent movements have continued to leave traders wondering which direction the markets will be headed next. As you can see from the charts below, the large-cap indexes that represent the S&P 500 and the Dow Jones Industrial Average have fallen below the support of their respective 200-day moving averages. On the other hand, the smaller cap indexes that are represented by the Russell 2000 and the Nasdaq have manged to hold above the support levels and look like they could be positioned to make a move higher.

IN PICTURES: 7 Tools Of The Trade

In our previous reports, we’ve been hypothesizing that the markets would remain in a trading range because of the emotional reactions at both the April peak and the May lows. With the strong bounce off this week's low, it appears bulls have been granted at least a short-term reprieve. Traders need to remain cautious, however, as Friday's selling pressure has left a lot of shares in weak hands, and these shareholders will be anxious to sell on any strength.

In looking at the S&P 500, as represented by the S&P 500 SPDRS (NYSE:SPY) ETF, you can see that Friday's bounce off the 200-day moving average suggests that this level of resistance might be stronger than many bulls would like to believe. If SPY is able to break above its 200 DMA then traders will quickly look to the $114-$115 levels as areas for the next wave of possible sellers. This was the early January high and an area of trading activity a few days ago.

Source: MetaStock

The Diamonds Trust Series 1 (NYSE:DIA) ETF, which tracks the Dow Jones Industrial Average, reacted almost in an idential fashion as SPY for another week with a strong reaction after testing its nearby 200-day moving average. While the majority of the week was spent trying to battle back from last week's losses, the DIA gave back some of its gains on Friday. There appears to be strong support near $98-$99 and this is a key level moving forward. A drop below that would surely have traders in a panic. Looking higher, the $107 area appears to be a possible area of overhead supply.

Source: MetaStock

The Nasdaq, as represented by the Powershares QQQ ETF (Nasdaq:QQQQ), fared a little better than SPY and DIA in that it managed to hold above its 200-day moving average. This is an important clue as it shows some leadership coming from the tech sector. Despite the fact that the QQQQ chart remains under pressure from the bears, the relative strength as compared to its peers is promising. There is still some room underneath before QQQQ tests its lows and if the markets continue to falter, it's possible that those lows will still come into play as a possible bottom.

Source: MetaStock

The Russell 2000, as represented by the iShares Russell 2000 Index (NYSE:IWM) ETF, is showing a very interesting story. When comparing the price action of IWM versus its larger cap peers, IWM was much stronger recently as it bounced nicely off its 200-day moving average. When looking at the larger trend, IWM remains in much better shape than its peers. Notice how the other indexes are close to their February lows, while IWM remains well above these levels. This suggests that the longer term strength in IWM is still intact, and that the Russell is still in a leadership role. As a market leader, IWM should be monitored closely to see if it begins to falter ahead of its peers.

Source: MetaStock

Bottom Line
Investors were certainly on edge this week as traders tried to fight back after last week's losses. While the reaction was positive for bulls, traders need to remain extremely cautious. While it’s tempting to rush in and start picking up bargains, relatively speaking, stocks were still showing weak performance this week based on Friday's market action. Many stocks are well under support levels and are not looking healthy. Most stocks are oversold and could continue to bounce, but there will be many traders looking to cash in on stocks they have held through the recent weakness. This is what makes this environment dangerous, as traders will be tempted with sharp rally attempts only to be met with other traders who have been anxious to get out at better prices. The markets will need to consolidate much further before a healthy trend can emerge. Until then, traders should either trade on shorter time frames, or simply stand aside and wait for better opportunities.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Have a Great Day!

By Casey Murphy

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

4 Steps to Mental Toughness for Short Term Traders

2010-05-31T00:00:00-04:00

Step 1 – Build a Strong Foundation

No matter what instrument or time frame you choose to trade, you need to have a solid understanding of the knowledge needed to trade that market. This can include everything from market basics (like contract specifications for futures traders), technical analysis, risk management, and order execution. There are many great day trading courses that can give you a broad understanding of all of those categories.

Along with risk management, comes discipline. You need to practice staying out of the market when you know the odds are not in your favor. So many people know when this occurs, but still chase trades. It’s all about control. You have to train your brain to think of the market as an opportunity pool, instead of getting stuck on low probability trades where you end up playing catch up.

Having a general education of the necessary short term trading tools is vital to your success, but is only the beginning…

Step 2 – Formulate Your Trading Action Plan

Once you have a solid understanding of the basics, then you need to develop an action plan that fits your personality and risk tolerance level. This includes the type of trades you take, your risk structure, and technical analysis strategy. Here are a few important questions to ask when developing your own personal trading action plan:

Do I have a positive expectancy based on my risk-to-reward ratio and win ratio?
What are my high probability situations based on my back testing and experience?
What is my signal for an entry, and how do I determine profit targets?

It may seem trivial, but every trader needs a “road map” that establishes their decisions prior to trading in the live market. Taking the time to write this out ahead of time will give you a personal level of confidence that most traders never experience. This can be the difference between blowing out your trading account and seeing consistent profits.

Something that helps me is starting every day with a prime trade; something I feel very confident with. Even if the trade doesn’t work out, I just want to gain confidence knowing that I am trading according to my plan. When you get a setup that you know fits your plan, play it boldly. If it goes the opposite way, that’s ok. You need to get comfortable with winning and losing. Look at every trade as an individual event, and don’t let the outcome of a prior trade change the way you execute the next. For example, a loss on the prior trade doesn’t mean that your setup won’t work on the next opportunity.

Step 3 - Develop Your Skill and Execution

Trading is a performance activity, and just like any professional athlete or competitor, day traders perform a sequence of action sets. If executed properly, a trader’s executions can be very profitable. Just like a professional golfer goes to the driving range, we must continuously take the time to develop and refine our skills.

A common misconception with traders is that they can read a book or take a course and start making money the very next day. For most of us, that’s not a reality. We need to go through a progression where we take our knowledge and develop a skill. Here are a few skills that are worth taking the time to practice:

Trading Skill #1: Recognizing and anticipating high probability situations before they occur

Trading Skill #2: Executing your entries without hesitation or double-mindedness

Trading Skill #3: Profitably managing your trades without getting shaken out by price action

Breaking these tasks up into individual skills can remove the overwhelming feeling some traders encounter when they start trading the live market. Any experienced trader will tell you that trading the live market is dramatically different than looking at historical charts, and requires a much deeper level of perspective to be able to profit on a consistent basis.

Also, don’t think of your trading in terms of money. Instead, look at it in terms of your performance, not how much you’re winning or losing. It’s possible to profit with poor performance, but that will eventually catch up with you. If you’ve been making money with undisciplined execution, then you have essentially been rewarded for reinforcing bad habits.

Step 4 - Review, Modify, Execute

It’s vital that you review every trade you take, regardless if it’s with real money or simulated trading. You must be accountable to yourself for everything you do in the market. If not, you could be setting yourself up for some big surprises. For example, if you take trades on a simulator that you wouldn’t take with real money, then you have very little chance of seeing the same results when you make the change to cash trading.

After you have some logged results with the trading action plan you prepared in step 2, then you can review the data to see if there’s room for improvement. This could mean adjusting your risk management structure, or modifying your trade setup criteria. Remember, trading is about continuous improvement. Don’t get discouraged if you’re not satisfied with your current results. Rather, shoot for steady progress in the right direction.

Finally, once you’ve re-evaluated your plan and made adjustments based on your current results, then you can go back and execute knowing you’ve done everything possible to stack the odds in your favor that can give you the greatest chance of success.

These four steps can give you the confidence you need to develop a high level of mental toughness. Learning the basics will give you the assurance that you have the technical knowledge necessary to trade your market. Then, writing out your action plan will give you a road map that guides your decisions. Taking the time to develop your skill will grant you personal confidence needed to trade the live market. Finally, reviewing and modifying your existing plan will put you in the right state of mind and ensure constant improvement.

By Kenny

Source http://club.ino.com/trading/2010/05/4-steps-to-mental-toughness-for-short-term-traders/

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Bump and Run Reversal Chart Pattern

2010-05-20T00:00:00-04:00

Bump and run reversal or BARR is a chart pattern indicating the reversal of an existing trend. The pattern was first identified by Thomas Bulkowski and was originally named Bump and Run Formation (BARF). Bump and run reversal is usually a long-term chart pattern which forms as a result of excessive speculation that drives the price too fast to the extremes and then shows a reversal.

There are both bullish and bearish versions of bump and run reversal. Bullish BARR pattern forms when excessive speculation drives the price down forming a large downtrend and an over-sold situation. The price rises sharply when more investors start to buy. Similarly bearish BARR pattern forms when excessive speculation drives the price up too fast, forming an over-bought situation. The price starts to fall when investors start to sell.

Bump and run reversal pattern comprises 3 different phases:

The lead-in phase is identified by a gradual trend development where the price rises/falls forming a trend. The trendline is moderately steep with average/low trading volume. The lead-in phase takes a month or more to form.
The bump phase is identified by sharp increase or decrease in price in the direction of the trend. The new trendline deviates too much (45 to 65 degrees) from the original trendline; and there is also a great increase in trading volume.
The run phase is identified when the price falls/rises to cross the original trendline. The breakout confirms trend reversal.

Before crossing the original trendline, the price bounces back many times to form a double top or double bottom. Traders can enter the trade when the breakout is confirmed.

Source : NobleTrading.com

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

May 9, 2010 Market Summary

2010-05-11T00:00:00-04:00

Well, you don’t see that every week. The markets dropped in epic fashion earlier this week as the Dow Jones retreated almost 1000 points intraday on Thursday. What started off as weakness generally attributed to concern over Greece and Europe eventually built up enough steam to trigger some unknown chain of events that snowballed into a crash. There have been rumors of a hedge fund blowing up, a “fat finger” error by an institutional seller and algorithmic computer programs gone wild. The bottom line is we will likely not find out what really caused the crash, but there is still plenty for traders to analyze in an effort to interpret what the markets are telling us.

Recently, we have mentioned how several market leaders were beginning to suffer from institutional selling and how the markets were starting to show cracks in its foundation. While a healthy pullback was expected, this week revealed just how fragile the markets are right now. Below is a weekly chart spanning the past three years for the S&P500 as represented by the S&P 500 SPDRS (NYSE:SPY) ETF. Sometimes it is important to step back and evaluate longer term charts to get a feel for the big picture. In looking at this chart one thing that pops out at you is how SPY failed right at the same level were it really broke down during the height of the financial crisis in 2008. This level now takes on even more importance, and this could be an important top for an extended period. The reversal from this level was very sharp and on huge volume. Another thing that stands out is the volume at this level as shown by the price by volume bars on the left hand side of the chart. The more volume involved in a price level, the more importance that level becomes. This is because more market participants are involved at this level and thus more emotions are tied to it. There are two clear levels on the longer term charts that could act as the boundaries for a new trading range based on the volume by price bars. The recent high just above $120 is one level and there is another level near $90 that marked the breakout area from the bottoming pattern back in 2009.

The Diamonds Trust, Series 1 (NYSE:DIA) ETF which tracks the Dow Jones Industrial Average is showing a very similar pattern to SPY. It reversed from an important level on a sharp increase in volume as well. While the markets have been on a strong rally for several months, taken in context, the markets have basically retraced about 2/3rds of the prior decline. DIA is also showing two longer term levels to watch moving forward much like SPY. The $113 level and the $90 level should be important from a technical perspective based on the price action that has occurred there. There is also an important support level near term near $100. This is the area that contained the last pullback in February and where the markets bounced this week.

It’s much of the same story for the Nasdaq as represented by the Powershares QQQ ETF (Nasdaq:QQQQ). The $50 level will be huge moving forward as traders will fear another reversal from this level on a subsequent test. The $40 level will likely provide near term support on continued weakness, but the longer term support level that stands out to me is near $32-$33.

The Russell 2000 has been leading for the past few months, but it also started to falter recently. The Russell as represented by the iShares Russell 2000 Index (NYSE:IWM) ETF is showing the same pattern present in its large cap peers. IWM reversed sharply from the $75 level confirming this area as resistance. Notice the failed rally attempts uin this area back in early 2008. Also, notice how the price volume bars are showing the largest concentration of volume over the past few months occurring at this level. All of this is pointing to this level being extremely important for IWM.

Bottom Line
While we have been preaching caution for the past few weeks, the trading action this week is ushering in a new sense of urgency for many traders. Many investors are concerned with the ease in which the markets sliced through buyers this week, and there is a real concern that market participants will take the next opportunity they get to reduce exposure to the current market. This is how levels become psychologically tied to market participants, and how traders behave in the next few weeks will offer much more insight into the next trend move. The markets have shown a very clear level where sellers overwhelmed buyers and this area is also significant on the longer term charts. Traders should be extremely cautious until this level is cleared. If the markets continue to weaken, there are some intermediate levels that should offer at least a reflexive bounce, but with the severity of this weeks drop, it is not out of the question that the markets are headed for a test of these longer term support levels.

Have a Great Day!

Casey Murphy
Senior Analyst, ChartAdvisor.com

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Top 7 Stock Market Tips Unveiled

2010-05-04T00:00:00-04:00

Saving money is something we all do to a certain extent. But, are we investing in the right place to serve us in the future? Stock Market is one such destination to invest your money that is of course the safest and the perfect places if and only if you know what you are up to.

Are you a beginner and looking out for some great tips on stock market? If so, here are a few tips which are simple and easy for anyone to understand and work accordingly.

1. Set your Goal - The first step is to understand what you like to do with your money in hand, either invest for some extra income or wait for it to grow to be used in your later years. Once the goal is set up, the next step will surely be to achieve it sincerely.

2. Learn more about the Stock Market - Stock Market is of course the perfect and the only reliable choice for your hard earned and saved money. Compare it with the performances that can be achieved with other options available like mutual funds, equity funds etc. With a small research done, you will certainly come to the conclusion that there is nothing better than the stock market to invest your cash.

3. Understand different trading strategies - You will have to understand and accept that never ever will the trading strategies be the same from the time you invest till the time you get returns. Therefore, it is very important to understand the three major trading tactics - when the market is up, when the market is moving sideways and also when the market is falling.

4. Do not go for Short Selling - One of the risky parts of Stock Market is short selling which most of them, even the intermediate analysts do when the stocks are falling. Wait for the status to recover or at least wait until you find any kind of results. Never be in a hurry. There is a lot of patience and confidence needed while trading with the Stock Market.

5. Select the broker wisely - Never fall for high cost brokers as they will charge a lot for the services done and therefore, it is always wise to do the investing process on your own rather than depending on one.

6. Paper Trading - Start with paper trading where you pretend to invest and make money trading stocks virtually. Once you start earning something from this and become confident enough to start the real trade, you can commence with the real money trading option.

7. Learn from the mistakes - You can refer to the trade details every year about what happened and how you lost or how others lost in the trade. This will certainly help you learn from the mistakes and never ever let you repeat the same. With more practises and thus becoming an expert you can make enough by just sitting right at home.

By following the above well- researched seven easy steps, any beginner can become an expert soon in Stock Market to reap more profits than you ever dreamt off! Stock Market is just the right place and nothing can ever be so smart, easy and authentic place to invest your savings!

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Article Source: http://EzineArticles.com/?expert=Rizvana_Abdul

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Stock Trading - Patterns For Smart Decisions

2010-04-24T00:00:00-04:00

These days, many people are skeptical of placing their money in the stock market, and there is good reason for this. Unlike the relative safety of a high yield savings account or certificates of deposit, putting your money in the stock market always involves a level of risk that you might never see it again. Of course, there are plenty of ways that you can minimize this risk, through market evaluation, company research, and smart budgeting of the money that you choose to put into the market in general. Still, new investors must remember that fluctuations in value are part of the natural flow of stock market, and stock trading patterns are the best tool for generating profit.

If you've been getting really excited that your stock trading plan is going to make it possible for you to recoup the losses of the past few years, it's important that you get those emotions in check before they lead you into treacherous ground. Both new and experienced investors can often get ahead of themselves in the trading game, because they put all their faith in the recommendation of a so-called expert who claims to have the direct line to the year's hottest stocks.

The stock market is almost never in the business of creating millionaires overnight. Instead, profits are more likely to be made when investors develop the ability to spot and interpret stock trading patterns in the interest of analyzing performance history. If you develop the skill of using the past to help you predict the future, you're going to have a much better idea of when to buy and when to sell. Without using technical analysis to constantly monitor the market this intuition can be hard for the average investor to imitate all by themselves.

Using stock trading patterns to help you dissect the movement can be a complicated undertaking, and it can help if you are connected to a community of experts able to help you to pick out strong trends as they occur over time. By practicing with the charts of a few days or weeks ago, you'll soon be able fine tune your skills and learn how to analyze the market on your own. Soon you'll be able to quickly notice stock trading patterns that indicate growth is in the near future for a certain stock. This will help you to spend your money wisely, and make safe profits instead of constantly dealing with high risk.

If you're interested in learning more about Stock Trading or you looking for Stock Picks ready to breakout, go to Stock Market Video the best source on the Internet that is recognized as the leading provider. Visit http://stockmarketvideo.com and get your FREE Daily Video!

Article Source: http://EzineArticles.com/?expert=Aaron_Livingston

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Double Top (Reversal)

2010-04-13T00:00:00-04:00

The double top is a major reversal pattern that forms after an extended uptrend. As its name implies, the pattern is made up of two consecutive peaks that are roughly equal, with a moderate trough in-between.

Although there can be variations, the classic double top marks at least an intermediate change, if not long-term change, in trend from bullish to bearish. Many potential double tops can form along the way up, but until key support is broken, a reversal cannot be confirmed. To help clarify, we will look at the key points in the formation and then walk through an example.

Prior Trend: With any reversal pattern, there must be an existing trend to reverse. In the case of the double top, a significant uptrend of several months should be in place.
First Peak: The first peak should mark the highest point of the current trend. As such, the first peak is fairly normal and the uptrend is not in jeopardy (or in question) at this time.
Trough: After the first peak, a decline takes place that typically ranges from 10 to 20%. Volume on the decline from the first peak is usually inconsequential. The lows are sometimes rounded or drawn out a bit, which can be a sign of tepid demand.
Second Peak: The advance off the lows usually occurs with low volume and meets resistance from the previous high. Resistance from the previous high should be expected. Even after meeting resistance, only the possibility of a double top exists. The pattern still needs to be confirmed. The time period between peaks can vary from a few weeks to many months, with the norm being 1-3 months. While exact peaks are preferable, there is some leeway. Usually a peak within 3% of the previous high is adequate.
Decline from Peak: The subsequent decline from the second peak should witness an expansion in volume and/or an accelerated descent, perhaps marked with a gap or two. Such a decline shows that the forces of demand are weaker than supply and a support test is imminent.
Support Break: Even after trading down to support, the double top and trend reversal are still not complete. Breaking support from the lowest point between the peaks completes the double top. This too should occur with an increase in volume and/or an accelerated descent.
Support Turned Resistance: Broken support becomes potential resistance and there is sometimes a test of this newfound resistance level with a reaction rally. Such a test can offer a second chance to exit a position or initiate a short.
Price Target: The distance from support break to peak can be subtracted from the support break for a price target. This would infer that the bigger the formation is, the larger the potential decline.

While the double top formation may seem straightforward, technicians should take proper steps to avoid deceptive double tops. The peaks should be separated by about a month. If the peaks are too close, they could just represent normal resistance rather than a lasting change in the supply/demand picture. Ensure that the low between the peaks declines at least 10%. Declines less than 10% may not be indicative of a significant increase in selling pressure. After the decline, analyze the trough for clues on the strength of demand. If the trough drags on a bit and has trouble moving back up, demand could be drying up. When the security does advance, look for a contraction in volume as a further indication of weakening demand.

Perhaps the most important aspect of a double top is to avoid jumping the gun. Wait for support to be broken in a convincing manner, and usually with an expansion of volume. A price or time filter can be applied to differentiate between valid and false support breaks. A price filter might require a 3% support break before validation. A time filter might require the support break to hold for 3 days before considering it valid. The trend is in force until proven otherwise. This applies to the double top as well. Until support is broken in a convincing manner, the trend remains up.

The double top in Ford took about 5 months to form. Even after the support break, there was another test of newfound resistance almost 4 months later.

From a low near 10 in Mar-97, Ford advanced to 36 by Dec-98. The trend line extending up from Mar-97 is an internal trend line and Ford held above it until the break in May-99.
From the first peak, the stock declined around 15% to form the trough.
After reaching a low near 30 1/2 in early February, the trough formed over the next 2 months, and there wasn't a rally until early April. This long-drawn-out low suggested tepid demand.
The decline from 36.80 occurred with two gaps down and increased volume. Furthermore, Chaikin Money Flow promptly moved below -10%. The speed with which money flows deteriorated indicated a serious increase in selling pressure.
In late May and early June, the stock traded for about 3 weeks at support from the previous low. During this time, money flows declined below -20%. Even though the situation looked ominous, the double formation would not be complete until support was broken.
Support was broken in early June when the stock fell below 28 1/2, which was more than 3% below support at 30 1/2. After this sharp drop, there was an equally sharp advance back above the newfound resistance level. While a test of broken support can be expected, it is usually not quite this early. The advance to 32 in late June may have triggered some unpleasant short covering for those who jumped in on the first support break. The stock fell to 25, and then began the retracement advance that would ultimately test support.

On the second chart, 30 3/4 marked the support turned resistance level, and 31 marked a 50% retracement of the decline from 36.80 to 25. Combined with the price action in early June and early July, a resistance zone could probably be established between 31 and 32. The stock subsequently formed a lower high at 30 in Jan-00, and declined to around 22 by mid-March.

Source: StockCharts.com Chart School Learn more about Technical Analysis and Charting Terminology

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Why gold will not make new highs or lows this year

2010-04-03T00:00:00-04:00

Gold has had some dramatic moves in the last eighteen months and we expect it will have some equally dramatic moves in the future, but not right now.

While I recognize that gold is one of the few commodity markets that people are really passionate about; the purpose of this article is not to take sides either with the gold bugs or those who reject the argument that gold is forever. Rather, I want to discuss my interpretation of the markets cycle.

After spot gold made an all-time high against the dollar on December 2 at $1,226.37, gold has been in retreat mode. For the for the past several months gold has been in a broad trading range, seemingly unable to move one way or another. This process has created frustration from bulls and bears alike.

Here is the dirty little secret about the gold market. It can be a horrible investment and here's why:

Gold first started trading in the 80s while I was on the floor of the Chicago Mercantile Exchange in Chicago as a member of the International Monetary Market, (IMM) which was at that time a division of the CME now the CME Group. When gold opened up the public clamored to buy into the gold futures market and guess who sold it to them? Thats right it was the pros- the guys who made their living trading. As a result, gold hit an all-time high of around $850 an ounce back then and it took almost 25 years for gold to move over that level, at least in dollar terms. I dont know what your timeline is, but 25 to 30 years is an awful long time to get even again.

So what is really happening in this market?

Everyone is aware of the problems in Europe with Greece, Portugal and a host of yet to be named countries. We all know that the huge amount of money being printed, coupled with the bank failures abroad contribute to the dollars declining value. These events, in conjunction with the American governments actions, also contribute to the devaluation of the dollar. The government claims that this is beneficial to exports, but the bottom line is that the purchasing power of the American dollar continues to erode in world markets.

Based on the declining value of world currency against gold you might ask- why isnt gold trading at $2,000 or even $3,000 an ounce? What is wrong with this market? This is because a great deal of what goes into the gold market is psychological and reacts to cyclic trends driven by both psychological and economic factors.

So what does all this have to do with the price of gold now? It has everything to do with gold and nothing to do with gold.

Here is what I've been able to observe in the last several years in gold and seems to be holding true. It is something that you should pay attention to if you're interested in the next big move in the gold market.

Before gold can move higher it needs to create what I call an "energy field". The most recent energy fields in gold were between May 12, 2006 and September 20, 2007. This 17 month energy field saw gold prices oscillate between a broad trading range bound by $730.08 (upside) and $541.80 (downside). That energy field produced enough power to propel gold to the new high of $1,012.40 on March 17, 2008. This marked the first time gold exceeded, in dollar terms, the highs set in the early 80s mentioned earlier.

The energy fields I have observed for gold are taking somewhere between 17 and 18 months to complete. If the energy field holds, then the December 3rd 2009 high of $1,226.37 should remain in place for quite some time. If the same cycle remains true then the recent lows that we witnessed, at $1,050, should also remain intact as they represent the 15 to 16 month cycle low.

With the lows in place the next question becomes when is the next cyclical high in gold? Based on the existing cycle, we can expect the next major gold high in 2011.

To summarize: I expect gold to be locked in a broad trading range for the next 12 months bounded by the December 09 highs of 1,226.37 and the lows of $1,050.00. If the gold cycle holds true, we expect that gold tops the $1,226.37 marker by April or May of 2011.

On the on the upside we will also be looking for gold to make a nature cyclic high in October or November of 2011. It's impossible to predict the future with any degree of accuracy; however when we look at the cycles in gold this reads as a pretty good bet.

No matter what happens we expect gold will offer some great trading opportunities that investors and traders should be able to take advantage of.

As I always discuss- in trading one should approach gold or any other market with a game plan and proper money management stops. The key to success in this decade will be an investors willingness to move in and out of asset classes such as gold and be well diversified into more than one asset class. That way you wont be left holding the bag for the next 25 years. Our World Commodity Portfolio is a good example of this approach and one I believe will serve investors well in the coming years.

Published: 2010-03-29

Source : http://broadcast.ino.com/education/gold329/

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Stock Indicators

2010-04-01T00:00:00-04:00

Williams %R Indicator

Williams %R, or simply just %R, is a momentum indicator popularly used by traders to find overbought and oversold levels. The indicator is similar to the %K of Stochastic Oscillator; the difference is that %R compares close to the highest high of a period opposing the lowest low as in stochastic oscillator. The formula is,

Williams %R = [{Close(t) - High(n) } / {High(n) - Low (n) } ] * 100

Where 't' represents today and n represents the number of periods.

Unlike most other indicators, Williams %R indicator has a negative scale; the values range from 0 (highest value) to -100 (lowest value). A close nearer to the highest high period will take the indicator nearer to 0 (overbought) and a close nearer to the lowest low of the period will take the indicator nearer to -100 (oversold). The typical period is 14, but traders can adjust it to make the indicator more or less sensitive.

Generally, values ranging from 0 to -20 are considered overbought and those from -80 to -100 are considered oversold. But often overbought does not mean it's the time to sell, or oversold does not mean it's the time to buy, because in strong trends the prices can remain in one range for an extended period of time. Traders should trade in the direction of the trend. During the periods of strong uptrend, traders can buy when the indicator falls to oversold values; and during strong downtrends, traders can short when the indicator shows overbought readings. Bullish and bearish divergences are also good signals, crossing of -50 from below or above.

What Is Alpha Indicator

Alpha is an important trading indicator which measures the performance of a fund or security or portfolio with respect to a benchmark or predicted return and to the risk taken. Simply, alpha is the difference between the actual performance and expected performance. Positive alpha means the fund/portfolio outperformed the benchmark, negative alpha means the same underperformed the benchmark and a value of zero means that it performed as expected.

Alpha = (Rp - (b * Rb))/n

Where Rp is the total portfolio/security/fund return, B is the

What is Style Drift?

Style drift is the divergence of an investment portfolio from its stated investment objectives. This is a common issue for many mutual funds and portfolios managed by money managers. Style drift can be intentional or unintentional. Although style drift is considered a 'bad thing'; sometimes it helps the fund to outperform others or to minimize risks through careful investments.

Most mutual fund style drifts occur when the fund manager deviates from long-term strategy to reap some short-term profits. Other causes include,

Change of investing strategies with respect to changing market conditions.
Re-allocation of portfolio asset for adjusting risk or reward.
Change of fund's management team.
Performance of similar funds, demanding portfolio adjustment to meet them.
Outperformance or underperformance of some assets in the funds holding.
Giving more freedom to the fund manager for active portfolio management.

In general, a fund manager's ability to stick with the original goal is considered a positive attitude. There are some services available to monitor the funds style, performances and asset allocation changes. Portfolio that tracks specific indexes (eg: index funds and ETFs) are often immune to style drifts because the indexes are usually very broad and transparent.

Source : NobleTrading.com

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

The Greatest Thing About The Great Wall

2010-03-24T00:00:00-04:00

Along a quiet stretch of the Great Wall of China sits potentially the greatest silver discovery ever. If estimates hold true, the haul could exceed 30 billion ounces of silver with a total value over $500 billion dollars. And a small North American mining company is working alongside the Chinese Government to bring the silver to market. The company’s stock prices could increase by at least 4,000% once the full value of the find is determined. You can get involved now by reading this special report we have prepared.

https://web-purchases.com/ISM/EISML328/landing.html?o=80955&s=82519&u=42336630&l=98161&r=Milo

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Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Bulls Versus Bears

2010-03-17T00:00:00-04:00

Who Has the Edge For the Balance of 2010? What to Do Now?

It was just about a year ago that the markets hit bottom. It was a market bottom born of the sub-prime mortgage catastrophe, fed by the banking crisis, and beaten to submission by the recession. Since then the rise has been nothing less than spectacular with the Dow Jones Average surging back 68% from the lowest point. This upward spike occurred despite the fact that unemployment is still hovering around 10%, the economy is still in a weakened state, and the international financial crisis is far from over (just look at Portugal, Italy, Greece and Spain). Further, there is great concern about the growing national debt, and future deficits seem to be impossible to avoid in consideration of the aging population's impact on Social Security and Medicare, and the potential new spending required for a National Health Care Program. Finally, while the residential mortgage market appears to be improving, and the economy seems to be responding, albeit slowly, to the stimulus package, and technically we are out of the recession, we still are suffering under a general malaise which seems to pervade every aspect of American life. What will happen with our trade imbalance with China? Is the falling value of the dollar a significant problem? Will commercial real estate suffer the same problems that residential property did? How will terrorism, the wars in Iraq and Afghanistan, concern over nuclear weapons development in Iran, instability in North Korea, weakness in the European markets, volatility in the energy markets, emergence of high tech in India, and other significant world developments, impact the US economy? Will our "log-jammed" congress be able to get together to pass legislation that will begin to solve some of our problems, or will we fall further into the mire of extreme political polarity with the primary concern of lawmakers raising money for re-election and supporting their party.

The FED gave us a hint today by holding the FED funds rate unchanged and commenting that rates would remain at "exceptionally low levels for an extended period of time." This indicates that they believe that, while we are coming out of the economic/financial crisis that brought us into recession, it is happening slowly and the recovery is very fragile. They want to do everything possible to encourage expansion and avoid a double dip recession, and it seems that they are the only arm of the government that has any power to make a difference. Whether they are successful or not only time will tell.

This past year, it was obvious that the markets believed that the stimulus package and the FED managing interest rates would be successful in bringing the US out of the doldrums. The various problems listed above are most likely already discounted by the market, and unless we face some unforeseen crisis, it would be reasonable to speculate that the markets will continue to respond favorably as the economy continues to improve, housing continues to improve, and eventually unemployment begins to go down.

Here's the rub. Historically the markets have proven to be unpredictable and random, and at times, even the very best analysts have proven to be wrong despite the most logical rationale behind their forecasts. Therefore, as investors, we need to make our decisions following the old cliché, "hope for the best prepare for the worst."

How should investor's proceed for the balance of the year given the uncertainty of the economy and market conditions? Historically, equities with a history of paying consistent and growing dividends generally do better during uncertain times. Traditional safe havens such as bonds which did very well, as interest rates dropped, will eventually be negatively impacted when the FED turns and begins to raise rates. While, based on the current FED position it is obvious that this will not happen in the short term future, the market looks ahead six months to a year, and sometime in the not too distant future we will see this begin to happen. This point of view is even more critical when looking at Mortgage Real Estate Investment Trusts. Historically, regardless of the type of MERIT, they have all dropped substantially when the FED begins raising rates. While some hedge interest rates, and some only invest in government backed mortgages, it doesn't seem to make a difference, the market simply hasn't liked this category in a rising interest rate market.

Meanwhile, certain quality utilities which were significantly more stable during the downturn, will more than likely do better during the recovery, although rising interest rates may be expected to negatively impact their price appreciation to a certain extent. Business development companies that kept their powder dry during the recession may excel during the recovery as they have a broad range of companies to choose from to add to their expanding business investment portfolios. However, at the top of my list for investing during these uncertain times are Master Limited Partnerships focusing on oil and natural gas, especially those that have paid consistent and increasing distributions. To focus in even tighter I am especially enthusiastic about MLPs that operate pipelines for oil and natural gas distribution. These pipeline MLPs are paid like an automobile toll road, the more oil or NG that passes through, the more money they earn. Additionally, while volatility in the price of oil or natural gas theoretically should not impact their profit margin (unless they are also involved in exploration and drilling) the pipeline MLPs tend to fluctuate to a certain degree along with oil and NG prices. With Oil prices at approximately 55% of where they were at their recent highs and NG at about a third of recent highs it is a fair bet that we will see further increases in the near future. If you believe that fossil fuel prices are going up, and NG usage is increasing then these government sanctioned pipeline "monopolies should do very well for the foreseeable future.

MLPs are tax favored entities established by the Federal Government in an effort to enable the everyday investor to participate in the oil and gas infrastructure that previously was only available to the very rich (there are also MLPs in other raw materials). MLPs pay no corporate federal tax, which leaves the tax burden on the unit holder to pay at their regular tax rate. However, due to the structure of most of these oil and natural gas MLPs, and the depreciation that they incur, generally most of the tax is delayed until such time as they are sold. It is well worth the effort, and not really difficult to learn the tax related intricacies of MLPs, and evaluate how they might fit into your diversified portfolio.

Perhaps now, more than any time in the past, with the price of oil rising and the use of replacement alternative fuels still in the future, quality MLPs with consistent and growing quarterly distributions are the bright spot in a market with a somewhat cloudy horizon. Information on MLPs is readily available on the internet through any search engine. Always remember, nobody cares more about your money than you do.So be sure to do your own due diligence as there are a wide variety of MLPs, with varying levels of quality and distribution rates, and not all may be suitable to your investment criteria or tolerance for risk.

Bob Boyd invites you to visit the High Yield Equity Stock Report for further articles and a regularly updated high yield dividend stock list: http://www.highyieldreport.blogspot.com This site is dedicated to assisting investors with their due diligence in the highly volatile and often misunderstood category of high yield dividend investing as part of a diversified investment program.

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Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Bearish Matching High Candlestick Pattern

2010-03-15T00:00:00-04:00

Matching high is a bearish trend reversal candlestick pattern indicating the reversal of an existing uptrend. The pattern generally forms at the top of an existing uptrend; but is less popular than bullish matching low pattern. This is a two candlestick pattern composed of two bullish (white or colorless) candlesticks.

The requirements of bearish matching high candlestick pattern include,

The pattern should form in an established uptrend.
The first day is a long bullish day closing at a new high.
The second day is also a bullish day which closes at or very close to the first day's close.

Bearish matching high candlestick pattern forms when the price tends to reverse after touching a short-term resistance level. The fact that the second day is a bullish day, which closed at previous day's close, indicates that the resistance is successfully tested; now the trend can reverse as traders tend to close their open positions.

Bearish matching high is a moderately reliable candlestick pattern, which requires confirmation of trend reversal before one can take any short positions.

Bearish Ladder Top Pattern

The requirements of bearish ladder top pattern include,

The pattern should form at the top of a strong uptrend.
The first three days are bullish days noticeable with long white/colorless candlesticks that close above the previous ones. This formation is similar to three white soldiers pattern which is bullish and formed at the bottom of a downtrend.
The fourth day is also bullish with a small real-body candlestick with a long lower shadow; it is a hanging man candlestick.
The fifth day is a bearish day, noticeable with a long bearish (dark or colored) candlestick which opens below the real-body of the fourth day candlestick.

Ladder top candlestick formation occurs when bulls lose control over the markets. The bullish candlestick on the first three days indicates that the bulls are controlling the market but the hanging man candlestick creates doubts on their minds. Traders start to sell-off their positions but the increased buying activity at the end of the day helps to close the day on a new high. The bearish candlestick on the fifth day indicates that the bears are taking control of the market and a new downtrend is beginning.

With ladder top candlestick pattern, trades should wait till the price crosses the low of the fifth candlestick.

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Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Gold Mining Stocks To Watch

2010-03-06T00:00:00-04:00

Commentary: With the recent strength in the U.S. dollar, gold and the companies that mine it have been mired in a correction. While these stocks have been correcting their move to recovery highs since late last fall, from a broader perspective it's clear that these stocks have technically been in a wide-trading range. The mining stocks recently tested the bottom of the range and turned higher, hinting that an end to the correction could be near. Currently, the gold miners are in a critical area on their charts, with a break above near-term resistance hinting at a resumption of the uptrend, and a move lower hinting at a larger topping process.

IN PICTURES: 7 Tools Of The Trade

In examining the chart of the Market Vectors Gold Miners ETF (NYSE:GDX), you can see the move to new highs in November and the failure to hold the breakout. GDX then proceeded to correct in three waves lower into the February low. Stepping back, you can see that this is all part of a larger trading range taking place from September to the present. GDX dipped under support in February, which could have shaken out some longs. It quickly snapped back into the base and is on its way to testing a resistance level near $47.50. GDX has cleared the 50-day moving average and a recent high. These are bullish clues, and could hint at an upside breakout.

Source: StockCharts.com

Newmont Mining Corporation (NYSE:NEM) is an individual miner that is leading the charge. NEM has endured a very similar pattern to GDX, but was able to successfully break free of the channel that was framing the recent correction. NEM is probably too extended to be in a good buying position, but the recent strength is hinting toward a test of the November highs. (For more, see 8 Reasons To Own Gold.)

Source: StockCharts.com

IAMGOLD Corp. (NYSE:IAG) is another gold miner that has been following a similar pattern to GDX. IAG recently tested the $13 level as support and there was an increase in volume as buyers stepped in. This level held on several occasions last year in September through November. This level remains a critical area to watch on the downside. Looking higher, IAG is in the process of testing the upper bounds of the channel it has been trading. If it can clear this area it could follow in NEM's tracks.

Source: StockCharts.com

Yamana Gold, Inc. (NYSE:AUY) is a gold miner that has been lagging the other miners, but has managed to hold critical support near $10. AUY has also been unable to close back above its 50-day moving average. With $10 holding as support, it would appear that AUY is headed toward a test of the upper boundary of the channel. If AUY can’t make it to the top of the channel before heading back lower, this would be a valuable clue that the $10 area might give way.

Source: StockCharts.com

Bottom Line
The miners are definitely painting a mixed picture right now. The large trading ranges being formed have the appearance of large topping patterns. While we can’t discount this possibility, the shakeout in GDX followed by the strength in NEM hints at underlying strength in the group. The miners are at a critical area here because a failure at these levels would put the topping thesis back in play. Much will depend on how the U.S. dollar and gold perform moving forward, but the miners have often moved ahead of the base metal. How these miners fare in the next week could have serious implications for their overall trend. (For more, see Using Technical Analysis In The Gold Markets.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

At the time of writing Joey Fundora did not own shares in any of the companies mentioned in this article.

Posted March 03 2010

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Understanding Stock Splits

2010-03-04T00:00:00-04:00

A stock split is a corporate action that increases the number of the corporation's outstanding shares by dividing each share, which in turn diminishes its price. The stock's market capitalization, however, remains the same, just like the value of the $100 bill does not change if it is exchanged for two $50s. For example, with a 2-for-1 stock split, each stockholder receives an additional share for each share held, but the value of each share is reduced by half: two shares now equal the original value of one share before the split.

Let's say stock A is trading at $40 and has 10 million shares issued, which gives it a market capitalization of $400 million ($40 x 10 million shares). The company then decides to implement a 2-for-1 stock split. For each share shareholders currently own, they receive one share, deposited directly into their brokerage account. They now have two shares for each one previously held, but the price of the stock is split by 50%, from $40 to $20. Notice that the market capitalization stays the same - it has doubled the amount of stocks outstanding to 20 million while simultaneously reducing the stock price by 50% to $20 for a capitalization of $400 million. The true value of the company hasn't changed one bit.

The most common stock splits are, 2-for-1, 3-for-2 and 3-for-1. An easy way to determine the new stock price is to divide the previous stock price by the split ratio. In the case of our example, divide $40 by 2 and we get the new trading price of $20. If a stock were to split 3-for-2, we'd do the same thing: 40/(3/2) = 40/1.5 = $26.6.

It is also possible to have a reverse stock split: a 1-for-10 means that for every ten shares you own, you get one share. Below we illustrate exactly what happens with the most popular splits in regards to number of shares, share price and market cap of the company splitting its shares.

What's the Point of a Stock Split?

So, if the value of the stock doesn't change, what motivates a company to split its stock? Good question. There are several reasons companies consider carrying out this corporate action.

The first reason is psychology. As the price of a stock gets higher and higher, some investors may feel the price is too high for them to buy, or small investors may feel it is unaffordable. Splitting the stock brings the share price down to a more "attractive" level. The effect here is purely psychological. The actual value of the stock doesn't change one bit, but the lower stock price may affect the way the stock is perceived and therefore entice new investors. Splitting the stock also gives existing shareholders the feeling that they suddenly have more shares than they did before, and of course, if the prices rises, they have more stock to trade.

Another reason, and arguably a more logical one, for splitting a stock is to increase a stock's liquidity, which increases with the stock's number of outstanding shares. You see, when stocks get into the hundreds of dollars per share, very large bid/ask spreads can result (see Why the Bid/Ask Spread Is So Important.). A perfect example is Warren Buffett's Berkshire Hathaway, which has never had a stock split. At times, Berkshire stock has traded at nearly $100,000 and its bid/ask spread can often be over $1,000. By splitting shares a lower bid/ask spread is often achieved, thereby increasing liquidity.

None of these reasons or potential effects that we've mentioned agree with financial theory, however. If you ask a finance professor, he or she will likely tell you that splits are totally irrelevant - yet companies still do it. Splits are a good demonstration of how the actions of companies and the behaviors of investors do not always fall into line with financial theory. This very fact has opened up a wide and relatively new area of financial study called behavioral finance (see Taking A Chance On Behavorial Finance.).

Advantages for Investors
There are plenty of arguments over whether a stock split is an advantage or disadvantage to investors. One side says a stock split is a good buying indicator, signaling that the company's share price is increasing and therefore doing very well. This may be true, but on the other hand, you can't get around the fact that a stock split has no affect on the fundamental value of the stock and therefore poses no real advantage to investors. Despite this fact the investment newsletter business has taken note of the often positive sentiment surrounding a stock split. There are entire publications devoted to tracking stocks that split and attempting to profit from the bullish nature of the splits. Critics would say that this strategy is by no means a time-tested one and questionably successful at best.

Factoring in Commissions
Historically, buying before the split was a good strategy because of commissions that were weighted by the number of shares you bought. It was advantageous only because it saved you money on commissions. This isn't such an advantage today because most brokers offer a flat fee for commissions, so you pay the same amount whether you buy 10 shares or 1,000 shares. Some online brokers have a limit of 2,000 or 5,000 shares for that flat rate, but most investors don't buy that many shares at once. The flat rate therefore covers most trades, so it does not matter if you buy pre-split or post-split.

Conclusion
The most important thing to know about stock splits is that there is no effect on the worth (as measured by market capitalization) of the company. A stock split should not be the deciding factor that entices you into buying a stock. While there are some psychological reasons why companies will split their stock, the split doesn't change any of the business fundamentals. In the end, whether you have two $50 bills or one $100 bill, you have the same amount in the bank.

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Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

What is a stock split

2010-03-04T00:00:00-04:00

All publicly-traded companies have a set number of shares that are outstanding on the stock market. A stock split is a decision by the company's board of directors to increase the number of shares that are outstanding by issuing more shares to current shareholders. For example, in a 2-for-1 stock split, every shareholder with one stock is given an additional share. So, if a company had 10 million shares outstanding before the split, it will have 20 million shares outstanding after a 2-for-1 split.

A stock's price is also affected by a stock split. After a split, the stock price will be reduced since the number of shares outstanding has increased. In the example of a 2-for-1 split, the share price will be halved. Thus, although the number of outstanding shares and the stock price change, the market capitalization remains constant.

A stock split is usually done by companies that have seen their share price increase to levels that are either too high or are beyond the price levels of similar companies in their sector. The primary motive is to make shares seem more affordable to small investors even though the underlying value of the company has not changed.

A stock split can also result in a stock price increase following the decrease immediately after the split. Since many small investors think the stock is now more affordable and buy the stock, they end up boosting demand and drive up prices. Another reason for the price increase is that a stock split provides a signal to the market that the company's share price has been increasing and people assume this growth will continue in the future, and again, lift demand and prices.

Another version of a stock split is the reverse split. This procedure is typically used by companies with low share prices that would like to increase these prices to either gain more respectability in the market or to prevent the company from being delisted (many stock exchanges will delist stocks if they fall below a certain price per share). For example, in a reverse 5-for-1 split, 10 million outstanding shares at 50 cents each would now become two million shares outstanding at $2.50 per share. In both cases, the company is worth $50 million.

The bottom line is a stock split is used primarily by companies that have seen their share prices increase substantially and although the number of outstanding shares increases and price per share decreases, the market capitalization (and the value of the company) does not change. As a result, stock splits help make shares more affordable to small investors and provides greater marketability and liquidity in the market.

extract from : www.investopedia.com/ask/answers/113.asp

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Channel Stuffing - Painted Fundamentals

2010-03-02T00:00:00-04:00

Channel stuffing, also known as trade loading, is an illegal business practice used by companies to blow up their sales and earnings figures. It is the ponzi practice of sending more products through its distribution channel than the distributors/retailers can sell. When the products are shipped from the company, they may be considered as sold and may be used to boost the figures.

Companies can do channel stuffing for various reasons like,

Painting the fundamentals like sales and earnings figures; to get better stock prices and media attention.
To meet up with competitors' (or its own previous) performances or targets.
To highlight/paint its performance over a specific channel like international trades or a specific product.
Poor sales force management can also be a cause; trying to meet-up the long-term target in a short-term.

Channel stuffing can be regarded as a short-term practice with long-term consequences.

As more products are shipped, the distributors tend to return the unsold ones or stop giving further orders; thus the future figures get worse.
Creating more products for channel stuffing can demand factory overtimes, and returning unsold products or lack of orders can result in factory shutdowns.
The fundamentals can become less and less attractive and can adversely affect stock prices.
The marketing and selling of products become more and more complex and unmanageable.

Many companies regardless of their size have been identified and criticized for their channel stuffing activities. In the U.S., the Securities and Exchange Commission has litigated some companies for these activities.

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The Truth About Oil

2010-02-18T00:00:00-04:00

What does this chart from the U.S. Energy Information Administration (EIA) tell you?

Exactly. There has been a dramatic decline in U.S. oil production.

The amount of crude oil produced per day per well went up in the 1960s. It reached a peak of 18.6 barrels per day per well in 1972. After 1972, productivity generally declined. The 2008 rate of 9.4 barrels per day per well was 49% below the peak – the lowest since the EIA began reporting oil well productivity.

Now, what does this chart tell you?

Right again. World crude oil production has basically flat-lined since 2005. And production is not going to increase anytime soon. Consider the words of Andrew Hall. (He’s the Chairman of Phibro LLC and a phenomenally successful oil trader.) He recently said that “oil production in many parts of the world has already peaked and entered a terminal decline.”

What About New Discoveries?

It’s true. Oil companies have found new sources. Last September, BP announced a giant oil discovery in the Gulf of Mexico. Estimated size? 3 billion barrels. Woohoo! The problem is, the field is six miles beneath the surface of the Gulf. So, like many new sources, it’s going to be expensive to get to it. And only 500 million barrels are recoverable with today’s technology.

To put this discovery in perspective, 500 million barrels would supply the world for a scant six days. In the end, this new oil will simply offset diminished production in existing oilfields.

Whether or not the world is running out of oil is open to debate. But, it most assuredly is running out of cheap oil.

Demand

According to the EIA, the world oil market should gradually tighten in 2010 and 2011. Demand will begin to grow again as the global economic recovery continues.

So now let me ask you to look at another chart.

World Population Growth

We’re in the midst of a population explosion. The world’s population currently stands at 6.6 billion. We are projected to reach 7 billion by 2012 and 8 billion by 2025. An undeniable long-term trend.

Will 1.4 billion more people on the planet in the next 15 years create any additional demand for energy?

What does this final chart tell you?

Yup. There’s no way to stop it. Global energy demand is rising.

And despite the U.S.’s EIA saying that nuclear energy consumption in America could increase from 8 quadrillion BTU to 16 quadrillion BTU by 2030, the world will still be dependent on oil for years to come.

Where to Invest

There are many ways to profit from this trend. One option is to invest in energy ETFs – and there are lots to choose from. Or you could invest in the large vertically integrated oil companies. That gives you exposure to oil and natural gas as well as to refining and distribution.

If you’re looking for more upside, try investing in the small and medium-sized oil exploration and development companies. To expand their reserves, the bigger companies will be swallowing many of them up in the next year or two.

It’s really simple. All you need to know about oil is that supply is flat and declining. And demand is increasing. For more specific energy investments, see Sound Profits.

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Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Gloden Agri

2010-02-16T00:00:00-04:00

I have lately cleared most of my counters invested in China Stocks, at a loss and moved my funds to Gloden Agri. (SGX)

I have calculated if Golden Agri moves upward to 0.72 cents i would have covered my losses.

My target for Golden Agri $1.50 cents to either hold or sell half my lots.

China Stocks not sure what is going to happen after the chinese new year, Govt. in China is very determine to control inflation and Banks mostly likely would be ask to increase their reserves.

However i am still keeping an eye on stocks like China Sports , Chinaoilfield, ChinaTechfibre waiting for this counters to dip further

What is Contrarian Investing

2010-02-13T00:00:00-04:00

Contrarian investing is an investing strategy that simply means going against the market. Contrarian investors go against current market views, indicators and trends to outperform the market. For example, they may sell stocks on high and buy at low even when the trends are strong. They may also prefer to buy stocks which are ignored by investors and may sell those ones which are hot favorites. The basic idea is to get into a good deal even before others realize it.

Contrarian is a strategy which can be followed in both bull market and bear market. The strategy works best when the markets are wrong; like in bubbles and bursts. The most similar strategies to contrarian investing are value investing strategy and deep value investing strategy. Like value investors, contrarian investors look for mispriced stocks using indicators like book value and P/E ratio. But contrarian investors also consider the market sentiment using indicators like volume indicators, earning forecasts, industry performances, analyst and media commentaries, etc before making decisions.

Contrarian investing involves very high risks and it demands high levels of market knowledge, intelligence, trading experience, market research and trading data. There are some contrarians who just like go against the market all the time; which can't be a good strategy as the market is right most of the time. The right strategy can be to look for opportunities where the market 'can' be wrong.

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What to Do When the Stock Market Tumbles

2010-02-05T00:00:00-04:00

Stock market investing is difficult and dangerous in the best of times. When times turn bad and the stock market begins to tumble, the danger levels increase exponentially. Make the wrong move under these circumstances and your entire net worth could be wiped out in no time at all. Years and years of careful savings and investment can dissolve in moments, leaving you stranded and your retirement unsecured.

Of course, there are things you can do when the market starts to turn downwards to protect yourself and your investment portfolio from being ravished and destroyed. That is exactly what I want to talk about in this article today.

Determining that the stock market has turned is almost an art form in itself. Sometimes it's hard to tell exactly when the stock market has turned because stock market volatility is perfectly normal. The stock market might go down today but jump right back up tomorrow. In fact the stock market may go down for several days or even several weeks only to rebound to a higher level than it was before. Determining that the stock market is in a new semi-permanent trending downturn or bear market as they call it is difficult to do.

But if you have determined that the stock market is in a bear downturn here are some things that you can do to protect your portfolio.

The first thing you can do is lighten your holdings as soon as you determine that the market is about to turn down. Don't panic because the market generally won't crash overnight. The bear markets trend downwards for weeks, even months... so you don't have to feel like you should go out and sell all your stocks tomorrow. During this time, though, you should be sure to pay off any margin debt that you have and start to hoard cash if at all possible. Maintaining a strong cash position during these times can become essential.

The next thing to do is identify stocks that you own in your portfolio that are no longer rising. Some people suggest that you sell these stocks immediately, but I prefer to place stop-orders on them instead. When you do this, you continue to own the stocks but if the market starts to trend further downward your broker will automatically sell the stocks at prearranged prices spelled out in your stop order. This way if the market turns up unexpectedly and the stock starts to rise again you'll be able to take advantage of it.

Next if you have excess cash to invest during the beginning of the market downturn be sure to only invest in cash equivalents and highly fungible items such as money market funds and treasury bills... which are short-term treasury bonds. The last thing you want to do is to be investing in stocks as the market is turning downwards.

Finally sell any mutual funds whose net asset value has dropped 5% or more. Many times it's important to get out of mutual funds that have aggressive growth at their core because these are some of the first to turn down in a bear market.

The most important part of a market downturn is getting liquid, or at least as liquid as possible so that you have a strong cash reserve available. Why is this important? Because eventually the market will bottom out at which time you will be able to find incredibly cheap deals for the same stock you used to own, which is now selling at bargain prices. Having cash handy allows you to swoop in and grab a steal of a deal.

Jason Markum has been writing articles online for over thirteen years. When not writing about investing, Jason runs a portable work bench web site where he reviews the best industrial work bench for your shop.

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Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Are you the person for FOREX trading

2010-01-29T00:00:00-04:00

I am going to explian to you in a short sweet way what FOREX is how you can improve and make more money, or if your a completely new you can start from scratch. I will suggest a program that i think will benefit the most (I can only say so much in one article) and give you some information on FOREX trading

First of all i would like to start of saying FOREX trading is a HUGE leap. FOREX trading can be very exciting, and it can also be very rewarding. If you know what you are doing. Please notice the BIG word "IF". When ever you are investing your money you should do as much research as you can.

This program can save you lots of time with it step by step guie on FOREX trading. If you want to make your own business hours, or start making more money with in the next month or so with some effort.

The following is going to explain some info on FOREX. FOREX stands for (Foreign Exchange Currency Trading). It is by far the largest trading market in the world today in the year 2010. On Average $1.9 trillion is traded everday in the foreign exchange market. Some people trade $200million to $500million at one time. Obviously that is a HUGE amount and you ont have to have nearly that much money to get started.

WHY? Why does this market have such a big risk? The risk is because the market fluctuates every 3 seconds, THATS 20 times a minute, and over or up to 18,000 times a day. If you stay on top of it and really do your research FOREX can benefit you and help you make money or help you start making money.

There really is so much stuff to learn about this type of trading, you really need to invest in a guide that will help you along the way.

My advice do your research if your still really interested in FOREX then definitely give this program a look.

htt://www.thegreenmoneymachine.com/

Thanks,

Travis

submitted 2010-01-26

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Confuse where to Invest

2010-01-24T00:00:00-04:00

I have recently clearly my lots at sinotechfibre at 0.18 cents and bought ChinaOilfield. (SGX)

Guess it is still to early to cleared my lots in sinotechfib the chart line is still moving up. However i have already made my margin when it dip at 0.145cents.It is still a good chance this counter will move up to 0.195 cent further and there might be a resistance at 0.195 cents.

Why than China Oilfield Technolog crazy me those who bought it few weeks back at 0.155cents to 0.16cents congratulation there are the dare devils,there could easily dispose it for 018 cents now. Myself i am entering a little late at 018 cents on this counter.

Presently their audit accounts shows negative or revenues decreased. However if we look at China as a whole She is hungry for commodities to fuel its growing economy sectors in oil, coal, iron ore,gold are few examples.

Chinaoilfield also have equipment and products that are used in oil recovery There also have book value orders (according to their website) once their technical issues are resolved.

China Companies has recently invested in oil-sands projects in Canada , kazakhstan, Iraq etc.

Looks like even if crude oil dips below 80USD it is a good chance there would invest in oil field equipments.

My target sell at 0.25 to 0.29 cents or hold a while longer. My concern Chinaoilfield might consolidate the shares even with their strong reserves since there also have a business plan to expand their manufacturing plants which is on hold.

Good luck in your trade

ezy

A recent article i picked up

extract :

if you like China, you should also like...

Brazil. Its massive amounts of mineral resources, fertile farmland, and oil are perfect complements to what China needs to grow. There’s a reason why Jim Rogers has been flogging Brazilian farmland as one of the best investments for the next couple of decades.
Australia. This is one of Ted Peroulakis’s (Options Power Trader) favorite bets for 2010. He says that "Australia is a natural resource powerhouse with large deposits of coal, iron ore, and uranium. On China’s doorstep, it’s perfectly positioned to benefit from its huge neighbor’s modernization efforts."
Oil. Imagine how high oil prices will go as the Chinese start buying cars. Ted says they’re moving rapidly in that direction. As a matter of fact, China recently surpassed the United States as the world’s largest passenger vehicle market.
Taiwan. If you marry Taiwan’s technology to China’s enormous customer base, you get a breakout market waiting to happen. Once every couple of years, these two countries sign an agreement that gives Taiwan more access to China than it had before. The next one (the signing of an Economic Cooperation Framework Agreement) is expected later this year.
Canada. I shared my thoughts about Canada with you late last year. Canada exports oil, coal, and minerals to China. It has also attracted a ton of Chinese money. Just last month, PetroChina won approval from the Canadian government to buy a stake worth $1.8 billion in two of Alberta’s oil-sands projects.And If You Don’t Like China?

If you don’t like China, it’s probably because its market has been subject to big swings in the last few years...

Last year, China’s market was up 74%.
In 2008, its market declined 64%.
In 2007, it rose 97%.

One way to take advantage of the economy’s growth spurts while sidestepping the fallout when growth stalls is to invest in the dividend globals that have aggressively moved into China.

In Sound Profits’ portfolio of dividend companies, there are five companies rapidly increasing sales in China...

The integrated energy company I recommended last month is up 3.7%.
The consumer company I recommended last month is up 9.5%.
The food company recommended last August is up 13%.
The oil company added last July is up 36.2%.
And the industrial conglomerate recommended last June is up 23%.

These companies have sales all over the world. If China’s economy goes into a deep freeze, they could feel some of the chilling effects – but just a fraction of the effects investing directly in a China fund or Chinese companies would have on your portfolio.

Invest Safely

Andrew Gordon

Investor's Daily Edge
Email us at: feedback@investorsdailyedge.com

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Where to Invest in 2010

2010-01-24T00:00:00-04:00

Commodities

I’m extremely bullish on the commodities sector. I expect commodity prices to head higher for two main reasons:

(1) Increasing demand due to a rise in economic activity. Economies around the world are doing much better. The U.S. reported positive GDP growth for the third quarter, so we could be out of the recession. Germany and France could also be coming out of the recession. And the economies of China, Brazil, and India are once again running strong. This will lead to an increase in demand for commodities like oil, copper, grains, etc. A steady supply of commodities is needed to keep the engine of economic growth running.

(2) The prospect of higher inflation. America has a national debt of over $12 trillion. And deficit spending is out of control. I agree with Bob Irish and Andrew Gordon that the government’s policy will be to inflate their way out of this problem. Washington can simply fire up the printing presses and print their financial obligations away. All that extra money in circulation should lead to higher inflation down the road.

Keep in mind that America was not the only country to dump money into its economy in order to save it. Many countries did it. Because of this, many major world currencies are destined to see high levels of inflation. The explosion in global money supply could lead to a decline in the value of all paper money around the globe. Investors everywhere are having less and less confidence in fiat paper money that’s not backed by anything. As a result, they are jumping into commodity investments to protect themselves.

To protect against inflation rearing its ugly head in 2010, you want a portion of your portfolio allocated in commodities.

I suggest you look at energy, agriculture, metals, and even commodity-rich foreign markets.

Oil is certainly the lifeblood of our society. Gasoline made from crude oil is still the cheapest and most efficient fuel for our vehicles, and demand for gasoline is not going away any time soon. Oil is now an alternative currency to paper money and will rise as the fiat currencies lose their luster. Oil demand is increasing in emerging markets like China and India. Plus, the worldwide supply of oil is running thin and it’s getting harder and more costly to get oil to the consumer. I expect oil prices to head over $100 per barrel in 2010.

I like the prospects for clean energy. This industry includes wind farms, nuclear power plant operators, and solar stocks. Governments around the world are offering tax breaks and other incentives to encourage clean energy use. This opens up significant potential for investors to profit.

Agriculture prices are poised to blast higher. The world’s population continues to explode and food demand is constantly increasing. The standard of living in developing nations is rising – and that will push food prices even higher. I expect higher prices for food. There will be plenty of opportunities to profit by investing in raw food commodities and the fertilizer producers.

Prices for metals are poised to head higher due to growing demand. The industrial metals (copper, aluminum, and silver) will see strong demand as economic activity picks up. And gold will head higher as people lose faith in paper currencies and turn to gold as an alternative currency. (Remember, gold can’t be produced out of thin air on a printing press.) I expect gold to continue to hit new highs in 2010. I predict that gold will head well over $1,500 and silver will head over $20 per ounce.

There is also an opportunity to take gains in select commodity-rich economies. I like Brazil and Australia. These are just two of the countries that will benefit from a continued bull market in commodities.

Yes, I’m bullish on commodities. But in case the economy weakens or the dollar strengthens, it’s important to diversify your portfolio with other asset classes. That said, utilities, technology, and health care are three additional sectors that I expect to perform extremely well in 2010.

* Utilities

This sector includes companies that deal with the delivery of electricity, gas, and water to customers.

Utilities need considerable infrastructure to operate. So they often hold high levels of debt. Interest rates should remain low well into 2010, and utilities will benefit from the lower borrowing cost.

Investing in the utility sector is considered a non-cyclical defense play because it’s less susceptible to a market selloff. I recommend that you hold utilities in your portfolio because of that and for added diversification.

* Technology

The companies in this space include those that make computers and cell phones as well as those that create software.

Tech was one of the best performing sectors in 2009, and should do exceptionally well into next year too. It will benefit from economic growth, which will boost orders and profit margins.

People are still spending money on technology, even in this difficult economic environment. Tech companies have been cutting costs and building up large cash reserves. The tech sector is quite healthy, indeed.

I expect some of the best plays to involve cutting-edge technology that can change the world. This includes cloud computing, smart phones, and military technology.

* Health Care

This sector includes hospitals, drug manufacturers, and producers of medical products.

Some kind of health care reform is coming soon, and you can profit from it. There will be many winners as a result of this new legislation, like hospitals and pharma companies.

With more Americans getting health insurance coverage, health care use will go up – and so will drug sales. That means higher revenues for the drug makers.

In Conclusion …

So there you have it. In 2010, put your money in commodities, utilities, technology, and health care. I’ll be recommending highly leveraged plays on these sectors in Options Power Trader. My goal is to continue to show my readers 100% or more winners with my options plays.

Best Wishes,

Ted Peroulakis

Email: feedback@investorsdailyedge.com

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.