Education Center
Would you please speak to the advantages/disadvantages of buying during the first 30 to 45 minutes of the open market trade and the last hour of the market?
A difficult decision is when to buy. It seems easy, and most of the time it is. You see a stock move above a breakout point and you buy. If the move is early, do you buy then or do you wait for the morning tug of war to resolve itself and then buy later? […]
How can businesses spend like crazy [referring to the passage of proper stimulus] when CEO’s are still having major headaches dealing with massive overcapacity they have borrowed to invest in during the past ten boom years, when companies are announcing plans to shut down factories and plants, laying off workers quarter after quarter and writing off billions of bad investments?
The key is the right kind of stimulus. If you get an investment tax credit for buying a comptuer system, phone system, new manufacturing equipment, that means on your bottom line taxes you subtract the amount you spent (limited by the size of the credit given) from your final tax bill. Figure your taxes and […]
Very nice seminar last night. I’m learning a ton. Question: you’ve mentioned LUV as a stock suitable for long-term gains. How do we distinguish which stocks on the reports are suitable for long term gains, as opposed to short term returns?
If it is a trading play, we will say it is a trading play. That means we are looking for the specific move targeted. Otherwise, we are looking for the stock to make a move higher and continue that move. The ‘targets’ are the level where we anticipate to see the first slowing or resistance. […]
As a practical matter, can you explain how you use stops as you define them? Also, how stops vs. stop limits work best when they carry over to the next day?
Stop losses are not perfect, but they are the best thing you can do to protect your gains other than watching the market closely or buying protective puts on long stock positions. A stop loss is designed to automatically trigger a sale of a security when that security hits a target price. You can place […]
What are your thoughts on security/defense stocks at this time? For instance, VISG which has raced up about 500% since Sept. 11 (today it moved up 56%). If I get into it now, am I just chasing it and subject to a big fall? Or does this sector have staying power in today’s environment, and makes a good short term play? On 9/10 VISG closed at 1.94 and today it closed at 13.10. On 9/10 INVN closed at 3.11 and today this stock closed at 14.73. Since these stocks have made their initial moves, I have been looking for a significant consolidation so that I would buy into, but thus far there has not been a significant downturn. I guess I could buy into at this level with a tight stop limit – but also feel they are overextended at this time, and I hate to invest in something where I feel that my stop limit will be executed.
Good question and we are getting it a lot in emails and in the seminars. It is the hot sector right now because it is the focus of some fear of terror. But that is not all. There is some real rationale for the stocks’ gains. Several have the technologies that we are going to […]
I really get a lot out of your perspectives and analysis of the market. I am in the market about 20 months now, and am becoming a fairly proficient chartist. I am interested in how you monitor intraday volume on the indices… all of them.
We monitor intraday volume using a real time services were we can watch volume as it occurs. You can keep up with volume fairly well at several sites on the web, including Yahoo!Finance.
Please explain why “worry is good for rallies”.
Emotion is a contrarian indicator. The old saying ‘just when everything was going well . . .’ has some wisdom behind it. Remember when all of the analysts were so bullish in early 2000 as the Nasdaq had rallied 80%? It was never going to stop. Just about that time it did. History shows that […]
Would you tell me what’s the symbol for Put/Call Ratio (CBOE)?
There is no symbol for the put/call ratio. It is a ratio of the number of puts traded on the option exchange to the number of calls traded. For example, a reading of 0.70 means that for every ten calls traded, 7 puts were traded. As you know, extreme put buying indicates extreme fear, and […]
I read stockcharts.com. In their daily chart they have the 50 day MVA as 15.91, in their weekly chart they have the 50 day MVA as 15.58, yet you say 16.16 is the 50 day MVA average that ABX just bounced off of. If your information is correct then mine is not. For obvious reasons I need to get this straightened out. According to my daily chart, ABX opened at the 18 MVA average and moved up from there all day.
Stockcharts.com most likely is using the 50 day simple moving average, and that is the discrepancy. We use the exponential 50 day MVA in most instances as that tends to track closer to actual movements by institutions. The exponential reading puts more emphasis on the latter days in the 50 day period.
I see the phrases “….strong /great /huge /or outstanding money flow and buying… ” used quite often in the stock synopses of the daily. I know that positive money flow and buying are good things. Are you using the buying indication to clarify that this is positive money flow, or is it something else? Also, is the Relative Strength often referred to, the RSI, or is it RS comparative (although I don’t know what it would be compared with other than say an industry/group index)?
We use money flow as a confirmation of what the price and volume action is showing us (that is 90% of our analysis). We do not base buying or selling decisions on it, but use it to either support our analysis or raise the issue as to whether we missed something in our analysis. Sometimes […]
