Stock Trading

The current bull market is apparent by the strong Bullish Percent Index values for both major U.S. indexes and sectors of the market. In the first screen-shot we have the Bullish Percent indicators (BPI) for seven major indexes and all are controlled by the offensive (X's or dark green background). The second slide shows BPI values and direction of ten sectors.Indexes: While six of the seven indexes are ranging in the over-bought zone (above 70%), this does not mean that stocks will not go higher. However, it does signal caution is merited. Of the indexes tracked below, the primary one is the broad based NYSE. After a brief negative period it turned positive again two weeks ago. The NASDAQ turned positive this week, so we now have all indexes under the control of the offensive. (click to enlarge) Sectors: Drilling down into sub-sections of the market, we

In my recent piece, "OCZ: It's Dead And Done", I essentially wrote that OCZ Technology Group (OCZ), after yet again notifying investors that it would delay filing its financials, was a stock not worthy of investment. At the very best, it's speculation in a market in which buying weekly calls on a solid name is better than buying a flea-ridden penny stock, and at worst it's a waste of money. However, I would like to play devil's advocate for a moment, and I would like to see if there's any hope that OCZ can actually come out of this mess. To be clear, I am not suggesting this will happen or is even likely (I still believe the views in the previous piece), but I am trying to construct a "blue skies" scenario to get a feel for what speculators are looking at, and perhaps give a

Is the forty (40) stock portfolio optimized if one assigns 2.5% to each stocks? Follow the optimized-momentum analysis to answer this question.Efficient Frontier: A quick glance at the Efficient Frontier graph shows us that equal allocation to each stock does not provide the most optimized portfolio. This does not come as a surprise. The equal allocation was done for simplicity just to see how the QPP analysis looking in a prior blog post. The optimizer-momentum software tool provides us with more information as to how we might improve the Return/Risk ratio for a 40-stock portfolio.Keep in mind that I placed a few constraints on the optimizer. For example, in this run I limited the percentage to be held in any one stock to be 10%. (click to enlarge) Efficient Frontier for 40 Stock PortfolioStock Rankings: Below is the ranking of the 40 stocks. Note that

Let this be yet another reminder to trust, but verify, every bit of information on Wall Street. For months, we've heard that a "Great Rotation" is underway. That is, investors are dumping bonds and promptly putting the money back to work in equities. And this uptick in buying activity is precisely why the stock market keeps hitting new all-time highs.Sounds perfectly logical. And Wall Street appears to be corroborating the theory. "You have this huge migration moving from grossly overweight fixed income back into equities," says John Stoltzfus, Chief Market Strategist at Oppenheimer. The only problem? The data tells an entirely different story.Here's the proof in a single chart - and, more importantly, why Wall Street's latest deception ironically bodes well for us… Stocks Back En Vogue I'll be the first to admit that a transition is afoot. In January, investors (finally) rediscovered stocks. U.S. stock funds

By John Nyaradi In recent days, the VIX index, the CBOE S&P 500 Volatility Index, also known as the fear index, has dipped back into extremely low territory, indicating high investor complacency and confidence in the short term future of low volatility and higher stock market prices. Today's low volatility and readings in the VIX index is a result of investors anticipating continued Federal Reserve intervention in the markets. The current situation has driven the VIX index to the 12-13 level, which is near the index's historical lows.VIX is widely viewed as a way to measure market risk and forecast future stock price movements. Some observers say that when the VIX index is low, market risk is low and prices are likely to trend higher. This camp also says that when the VIX is high, lower prices are ahead as fear is the dominating force in the market.Contrarians

In short, probably not. And, it still seems that the low for this decline has not yet been hit either, but we are very close.But, that does not preclude us from seeing a sizable rally about to take hold in the near term, after we do hit our bottom around the corner. Yes, you heard me right. I am expecting a rally that can take us as high as the 26-27 region, still. But, the question will be if it is a rally which will be the start of the rally to new all-time highs, or simply a corrective rally setting up a final short trade into the final bottom sometime late this summer or early fall. At this time, I lean strongly towards the latter.Last week, I noted that the potential existed for the market to head to the 26 region sooner rather than later. Clearly, when

Many have been quite surprised by the demand for gold in India of late. In fact, gold and silver imports into India in April more than doubled the amount from a year earlier. So, why did gold fall this past week?Well, in very simple terms, sentiment is not yet ripe for the rally to take hold, but we are getting much, much closer. However, I am still unconvinced that it will be more than a corrective rally, as my primary expectation of a bottom sometime in the summer or fall.As I discussed in my most recent silver article, it seems that many are now coming to the realization that QE will not drive metals prices higher. In my silver article, I pointed towards John Wagner's recent gold article noting the same. But also explained why I feel that most market participants inappropriately look towards the fundamental factors they

The key to staying on the right side of the market is in knowing how to collate the different tradable patterns in that market. Contrary to what many educators teach it is not "top-down analysis" which counts, but identifying those times when the majority of patterns are aligned. It is widely taught in technical analysis that the higher time frame trends exert the most influence on today's prices. We now know this to be not entirely true. In today's marketplace where a full 95% of financial futures volume is day traders, the Primary or Secondary patterns are not nearly as influential as the Day to Day pattern. (The Day to Day Pattern is a reflection of the day to day news events which are influencing the market) Likewise a lower time-frame pattern, such as the 10-day pattern can be the most influential of all, if a shift on that time-frame

Since the 2008 and 2009 crisis hit the U.S. auto industry, following the fortunes of Ford Motor Co. (NYSE:F) has felt like being on a precarious roller coaster ride. With fluctuations in the market, swinging share prices, and devastating losses followed by a much-awaited return to profitability, Ford has kept investors and consumers on their toes. And while both General Motors (NYSE:GM) and Chrysler went through bankruptcy, Ford, which managed to survive without bailout funds, did have to ask Congress for an emergency $9 billion credit line. However, it may finally be possible to say that Ford’s recent success has finally won it the credit of even some of its toughest critics. Here are five examples of how the U.S. automaker has attempted to prove its turnaround: NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW! 1) Younger buyer base Ford has lately proven itself capable of offering some friendly competition to even the most exceptionally popular cars. Numbers show that Ford’s Focus ST is winning the numbers game against Volkswagen’s Golf GTI, and subsequently attracting younger buyers. With the Focus’s increased horsepower, better mileage, and enticing price tag, it appears to be beating Volkswagen at its own game while drawing increasing demand from enthusiasts. Although it will need to continue to develop to keep up with competitors, Ford has finally proven itself as a force to be reckoned with. 2) Increased hiring Ford shared more good news earlier this month when the automaker announced it was adding 900 more jobs to its plant in Claycomo that will serve to meet the demand of more F-150 pickup trucks. This addition comes on top of the previously announced 1,100 jobs that were added to support the building of the new Transit van. Four years after the auto industry crisis, Ford has finally been able to put doubts about the industry to rest. Kansas governor Jay Nixon said that “the extra jobs were a powerful symbol of the resurgence of manufacturing in the U.S.” 3) Stock price on bounce Not only is Ford’s share price up more than 16 percent from the start of the current year, it has grown a whopping 42 percent in the last year alone. By comparison, the S&P 500 is up 16 percent and 23 percent over the same two periods, respectively. The company has also beaten analysts’ earnings estimates in the past four quarters by an average of 18.8 percent. Bank of America Merrill Lynch has a twelve-month price target of $20 on Ford — representing a 40-percent gain from current levels. Although Wall Street remains skeptical of the “cyclical auto industry,” Ford has posted remarkable progress. 4) Winning the hybrid battle Ford continues to be optimistic about the future, especially after it declared in early May that “it will pass its full-year record for U.S. hybrid sales this month on demand for its Fusion and C-Max models,” as reported by Bloomberg. Chief Executive Officer Alan Mulally used the past year to introduce the new C-Max hybrids and electric versions of its redesigned Fusion sedan to provide competition for the hybrid-dominating Toyota (NYSE:TM). Hybrid deliveries for Ford reached a monthly record 8,481 in April. 5) Fan favorite Not only has Ford proven its ability to win its customers’ service, but recent research reports also illustrate that it has won its customers’ loyalty. In Experian’s Loyalty and Market Trends report, Ford took the top spot in loyalty during Q4 2012, surpassing General Motors and Toyota. Almost 48 percent of the customers who owned a Ford vehicle returned to market to buy another Ford. Ford also remained the top automaker in overall brand loyalty, with 47.1 percent of Ford owners returning to the market to purchase another company vehicle. Stocks with improving trends are worthy of your extra attention. In fact, “T = Trends

There have been several posts over the past few weeks discussing college / university education. Goldman Sachs economist Jan Hatzius stated: [T]he faster job growth among college graduates is entirely due to faster growth in the size of the college-educated population; the employment/population ratio among college graduates has in fact fallen sharply, Here is a graph showing the relative growth of employment of college / university graduates (blue line) and high school dropouts (red line). (click to enlarge) This post was accompanied by the following graphic showing the differentials in the employment - population ratio. (click to enlarge) This discussion needs additional context as the implication is that lower educated people's lot in life is improving, while higher educated people's potential is declining. Before going too far, be sure to note that 76% of college graduates are employed (compared to 58%+ for the total population), while the ratio for