Upside Break Out On US Markets – VIX Dropping
By · CommentsThe picture is starting to improve in the US, with unemployment falling and Obama getting aggressive on improving the economy, the market is reacting positively. Also, the lack of any more horrific news in Europe is also having a positive effect.
Although how long Europe will remain quiet is another story. Greece is wandering towards disorderly default, but Italy is the big scare at the moment. Angela Merkel’s rallying cry that more needs to be done in Europe to stimulate the growth of the faltering countries is the right thing to do, lets see if any real action follows.
But at least for now the U.S. stock markets are rallying and volatility is moving to down to the 2011 and 2010 lows.
U.S. Stock Market Breakout
S&P 500 – Ticker:SP-500; Dow Jones Industrials – Ticker:DJ-30; Russell 3000 – Ticker:RUA-X.
Here is a chart of the SP-500 featuring the recent breakout of the ascending triangle formation.
Telechart Image Courtesy Worden Brother Inc. Telechart 2000 Our Recommended Software
The break out of the ascending triangle is a classic pattern with 5 bounces off the triangle then a break through the 1280 mark. All this on moderately increased volume suggests some increased buying into this rally.
VIX Volatility Decreasing Is An Encouraging Sign
Volatility can be easily measured using the Chicago Board Of Options Exchange (CBOE) Market Volatility Index (Ticker:VIX).
Telechart Image Courtesy Worden Brother Inc. Telechart 2000 Our Recommended Software
The CBOE VIX shows the markets expectations of the 30 day volatility of the S&P 500. It is calculated using the implied volatility of a broad range of S&P 500 Options contracts. Calculated from both calls and puts, this is a widely respected gauge of investor sentiment.
A number above 30 usually implies a lot of volatility, meaning a lot of FEAR & GREED in the market. A number below 20 implies a calmer market. A calm market is usually an increasing market, see for example the down trend in the VIX from 2003 to 2007, this correlates to the uptrend in the market through this period.
In this weekly chart of the last 8 years you can see at times of market panic (the 2007/2008 financial crisis) there was a massive spike in volatility. The figure today is at 20, suggesting that, for now, the market is calm and attempting to eek out regular gains. How long this will last is anyone’s guess.
A heartfelt thank you to those of you who completed the customer survey we sent out in December 2012. We conducted two surveys, one for our students of the PRO Training Course and another for our members of the Free Trading Academy.
We learned a lot from your feedback and would like to share some of it with you.
The Liberated Stock Trader Book
57% Satisfied, 43% Very Satisfied, 0% Dissatisfied.
The Liberated Stock Trader PRO Training consists of two major components, the Liberated Stock Trader Book and the 16 Hours of Video Training that accompanies the book.
The results for the Liberated Stock Trader Book were very encouraging and we thank you all for the positivity. With 57% of our customers Satisfied and 43% Very Satisfied, this was beyond our expectations. This means that no-one who purchased the training course and completed the survey was dissatisfied or even neutral.
The Liberated Stock Trader PRO 16 Hours of Video Training
43% Satisfied, 53% Very Satisfied, 0% Dissatisfied.
The second major component of the training are the Video Lessons, we scored even better on this with 57% of our respondents Very Satisfied and 47% Satisfied.
Again we had no-one dissatisfied.
The most popular sections of the training were Essential Knowledge and Economics, Waves & Cycles & Stock Charts & Indicators. The lowest rated section was the Chapter on Strategy which was rated with 29% neutral and 71% Satisfied or Very Satisfied.
We also offer additional services with the training such as the entire training available on Mobile Edition for iPhone. 50% of the respondents were Neutral on rating this option, perhaps because they did not use it or have a need for it. Again no-one was dissatisfied with it.
The Trading Academy Free Training Course
94% Good, Very Good or Excellent
Our second survey was conducted with our Free Members and we asked them how they rated the Trading Academy Free.
We were very happy to hear that 22% of people found our free training Good/Useful, 31% thought it Very Good and 42% found it Excellent. We are very proud of this fact.
6% of people were dissatisfied. We received a number of comments regarding usability, location of the logon box and issues with navigating through the content. We have made a number of changes to improve the user experience, for example, addition of a privacy policy, location of the logon box in the top right of the screen and added additional menu items in the member content area. We hope this helps.
The Free Stock Market Training Video Content
15% Good, 48% Very Good, 30% Excellent
We achieved very similar results for the ratings of the Video Training in the Free Training. Again 6% of you were dissatisfied. Some comments such as “the Podacast should be available for Android not just iPhone”, “the free training navigation could be improved” and “please include live trading videos”. We will work on this.
Summary Results
The team and I are very thankful for your thoughtful and provoking feedback and we will continue to offer our Free and Premium services in the manner you are accustomed to in 2012.
We wish you and your family a fulfilling and profitable new year ahead.
The Top 20 Stock Market Books Reviewed & Rated
By · CommentsWondering what to do with the Amazon.com gift vouchers you got for Christmas? Why not invest in a good book.
Here you will find a selection of the most highly rated stock market books available, including a detailed review and ratings based on the content, practicality and readability of the books.
How we rated the books.
Purely Stock Market Strategy books covering specifics of fundamental analysis, technical analysis are rated like this:
- Depth of Content: How deep does the book go into the subject matter.
- Applicability to Investing: How applicable is the material to helping to improve your investing success
- Readability: Is the book easy to comprehend or difficult to read
- Fundamentals: How well does the book cover things like the Balance Sheet, Fundamental Analysis or value investing
- Technical Analysis: How well does the book cover the topics of charts, indicators and price action.
Books that are not specifically about making money in the stock market but rather prividing background to the financial industry, Wall Street or power and politics, are rated like this:
- Depth of Content: How much actual stock market content is contained within
- Applicability to trading: How applicable is the material to helping to improve your investing success
- Readability: Is the book a good read, entertaining
- Insight into subject: Does the book provide a real insight into the subject matter, is it thought provoking
For the ratings the percentage of stars gained is calculated to ascertain the overall percentage rating.
Happy reading and a happy new year.
Dear Liberated Stock Traders,
as the market continues to move sideways through indecision and anxiety, now is a good time to set up a basic stock chart to allow you to view the long term direction of the stock market and create a trading rule.
This will help you understand where the market is and what the likely direction is going to be.
Stock Chart Setup
You can use any charting package to achieve this goal.
- Select a Weekly Chart – 5 Days Per Bar
- Select your favorite index
- Add a Simple Moving Average Indicator
- Make it a DASHED LINE (optional)
- Set the Moving Average to 40 (the reason we do this is if the chart is weekly meaning 5 days per bar the a 40 bar moving average is equal to a 200 day moving average).
- We can refer to this as the Moving Average 40 on a weekly chart.
The 200 Day Moving Average is the bread and butter of the Technical Analyst.
Use these rules to enable you to understand the 40 Bar Moving Average.
- When the price on the chart is above the 40 bar moving average the index is in an up-trend (see the green boxes below)
- When the price is fluctuating on or around the moving average is is in a sideways consolidation
- When the price is clearly below the 40 bar moving average the index is of course in a down-trend (see the red boxes)
So what is the rule to use to interpret this chart.
Ask yourself this question. On a weekly chart, do you really what to be investing long (expecting price rises) when the price is below the 40 bar moving average (the RED BOXES)
Stock Market Investing Rule For Medium / Longer Term Traders
When the Price Pattern of the Index breaks down through the 40 bar moving average = Bearish = Sell = Go Short.
When the Price Patter of the Index break out above the 40 bar moving average = Bullish = Buy = Go Long.
2011 Member Survey Is Out – Tell Us What You Think.
By · CommentsDear Liberated Stock Traders,
a special thank you to those of you who have already completed the survey we sent out. This is a great chance for you to tell us what you want and for us to understand what you like, what you do not like and what you want more of.
I already see some fascinating and thoughtful feedback from many of you.
One question specifically is proving very interesting.
What are your biggest concerns or fears about investing in the stock market?
This will really help me to write articles and provide simple strategies to help improve your confidence and hopefully profitability.
Another important question for us is “How you rate our services”, including the Free Training, Free Videos, Podcast, Email Newsletters, Website Design and also the elements of the Liberated Stock Trader PRO Training.
I am also seeing plenty of feedback on what can be improved, this will be our focus for the coming year.
A big thank you to you all.
The End Of The Euro? Market Outlook
By · CommentsAs the European Governments, primarily Germany and France, contemplate what to do to save the Euro, the Union stands on the precipice of collapse. This is having a detrimental effect on the global economy and the US Markets. The recent sale of German Bunds that failed so sell the full allotment shows that there is a serious worry about the health of Europe. Make no mistake, a collapse of the Euro Zone will trigger a collapse in the global economy which may take at least 5 years to recover from.
We need bold action from the European leaders.
Since my last post on November 10th suggesting that now is a very bad time to be bullish, the market has plummeted 8%. This is nothing compared to the volatility and decline we will see if European leaders and the ECB are not bold and aggressive.
Monetary loosening and devaluation of the Euro due to quantitative easing to fund the bond purchases required to support the debt of Italy and the other PIGS (Portugal, Ireland, Greece, Spain) is the only option.
Now is still a very bad time to be bullish.
Understanding the direction of the market is critical to success. Whether the market moves up or down there are way to profit. Looking at inverse ETF’s in a down market can be a good source of profit.
5 Day Return on US Inverse ETF’s
FAZ – Direxion Financial Bear 3X Shares – 17.44%
SPXU – ProShares UltraPRO Short S&P500 – 14.9%
TZA – Direxion Small Cap Bear 3X – 12.55%
QID – ProShares UltraShort QQQ – 11.46%
DXD – ProShares UltraShort Dow 30 – 8.88%
Take care of your money and your portfolio.
