SP-500 – Another Down Day Signals Down-Trend in S&P 500
By · CommentsWith 7 of the last 9 days on the U.S. Markets being negative the S&P500 index along with the Russell 3000, the Nasqaq 100 and Nasdaq Composite are all in short to medium term downtrends.
The S&P500 is now 60 points off the low for 2012 halvings its gains for 2012, currently standing at 1,388 is only 5% higher than the high on January 3rd 2012. The index has suffered a 4.8% drop in the last 9 days of trading.
We can expect a short term rebound, but the likelihood of a strong rally heading into the summer months is weakening with every passing day.
The situation in Europe is playing on investors’ minds, with Greece in a situation of flux highlighting the potential for a Euro exit and Spain with an almost irreversible unemployment problem.
The only positive in Europe is the strengthening German economy, but most fear this is not enough to stop the rot as the Germans cannot and are unwilling to try to bail out everyone.
Prepare for a slow decline into the summer months unless something significantly changes.
SP-500 Within Upper Fibonacci Retracement Lines
By · CommentsFibonacci Retracement can be useful to help assess natural waves in the stock market’s price movements. For further reading see this training article on Using Fibonacci or watch this Fibonacci video/podcast.
If we use the Fibonacci retracement tool in our Stock Analysis Package, and draw the line from the December 2011 low to the 2012 high on a price chart we see the following retracement lines drawn.
This is a daily chart with the the following Indicators
- Simple Moving Average (SMA) 10 (day), 20, 40
- Volume at Price (Horizonal Volume Bars)
- Fibonacci Retracement.
Price has moved up to a new 2012 high in April and subsequently pulled back throughout April to bounce of the Fibonacci 23.6% line. Ther fact that the index is not breaking lower here suggests this is a fairly strong line of support. The more bounces off a line the stronger it is.
The market may continue to move sideways through the upper channel and lower channel indicated on the chart for some time. What we do know is any significant break up through this area will be very bullish, and any significant break down would be bearish. So now is not a time to panic.
As Warren Buffet said yesterday on FOX Business – “I think the worst mistake you can make in stocks is to buy or sell based on current headlines”
As we go to press the S&P futures are down 73 points. This could bring us under the lower channel. What is important is how the market closes.
A bad week for stocks, but we have seen worse
By · CommentsLast week was not a good week for the stock market, particularly Friday with a 1.61% pullback in the S&P500. The U.S. Markets, particularly the S&P 500 are showing an 8 week consolidation pattern bouncing between 1,369 and 1,423.
A break down through the 1,350 mark would be seen as a short term bearish pattern. However during this period we have not seen any signs of a change of sentiment in the participants with volume remaining right on the 10 day
moving average.
Although last week’s Friday close looked quite bad with a 1.6% pullback, for the overall week the market was down 2.5%. This is way under the pullback which I would classify as a market shock.
The outlook for the market is:
- Short Term – Consolidation
- Medium Term – Consolidation
- Long Term – Uptrend
What Shocks Await The Stock Market in Summer 2012?
By · CommentsHow short the memory can be. This time last year at the start of May 2011,
the U.S. markets peaked for the year and then promptly sold off and lost 30%
through to October 2011. A similar thing happened in 2010, the S&P 500
peaked at 1217 in April, and then sold off 23% into the summer bottoming in
August.
According to Elliot wave theory, if we look at the trend from the bottom of
the 2009 on a weekly chart we can see we are embarking on the 5th wave of
the primary uptrend. This means after this wave is complete we can expect a
strong pullback.
What does this all mean?
Well, simply beware that there may be the usual slow down in the markets
over the summer period. If there continue to be worries over European
sovereign debt this may help to fuel a sell off.
We have been in a bull market for over 3 years now and the markets are just
15% to 20% off their all time highs, but the worrying thing is they have
only a partially healthy economy to support them.
Article from the newly launched News.LiberatedStockTrader.com
Just Launched – news.liberatedstocktrader.com
By · CommentsJust when you thought the Internet was jam packed with content, another site has been launched.
However this one has a serious difference.
News.LberatedStockTrader.com will bring you breaking news and expert analysis of the LST 100 index of the best growth stocks the USA has to offer.
What is the Liberated Stock Trader 100 Index? (LST100)
Imagine if you filtered all 7000+ stocks in the U.S. down to just 100 stocks that showed excellent recent earnings history, reasonable P/E and strong growth prospects for the future.
That is the LST100!
Expect regular updates on the movement of the LST100 components, breakouts, buying opportunities and expert technical and fundamental analysis in just a few sentences.
The message – Expert independent stock analysis on the best growth stocks in the U.S.
Jump over now to get the best analysis on the best U.S. Stocks.
Stock Analysis
By · CommentsStock Analysis. What is stock analysis and how is it done?
Since the publication of the classic book by Benjamin Graham in 1934 called “Security Analysis”, an entire industry has built up around the analysis of stock market investments.
There are various methods used to evaluate the past, present and future performance of stocks from professional analysis to private stock pickers. Methods employed use primarily two approaches, Fundamental Analysis or Technical Analysis.
Institutional Stock Analysis. Wall Street Analysts
Most of the investment banks and brokerage houses employ Stock Market Analysts. Their job is to research the firms in the industry they are allocated to, in an attempt to assess if the companies are worth investing in. You can purchase the “Analyst Reports” from S&P, Moodys, The Street, Credit Suisse or the plethora of other information providers out there. The analysts usually attend the shareholder meetings for the companies they cover and probe the management team for further information. Wall St analysts come under constant scrutiny for the meaningless jargon and inaccurate rating they put on stocks. There is no aligned meaning across the research house as to the meaning of ratings such as:
- Strong Buy, Hold, Sell, Strong Sell
- Outperform, Perform, Under perform
- Overweight, Underweight
- Long, Neutral, Avoid
- Accumulate, Hold, Distribute
The analysts tend to avoid negative opinions as they tend to receive flack from the management teams and pressure that they may lose access to the companies they cover. Analysts are not paid for the performance of their stock ratings, therefore they have limited motivation to be accurate.
“Wall Street Analysts are bad at stock picking”
Stephen T McClennan – Book Full of Bull
Does “Buy” really mean buy the stock. What if the highest rating used is Strong Buy. Does that mean that buy is more negative than Strong Buy?
Wall Street is oriented towards increasing stock prices, they have to be positive in order to convince people to continue buying.
In a 2006 CFA Magazine Research article by Mike Mayo it was noted that of the recommendations on the Top 10 Largest Cap stocks in the U.S. there were 193 Buy Ratings and only 6 Sell Ratings. Systemic Bias….?
Stephen T McClennan – Book Full of Bull
Do not take analyst ratings as literal, you cannot rely on them.
Stock Newsletters – Stock Pickers
There are also many newsletter services available where you can register to receive stock recommendations. You will usually receive a daily or weekly newsletter that recommends what to buy and sell. They come in two flavours, “Free Newsletters” and “Pay for Services”.
At all costs avoid any Free Stock Tips Newsletters. The comapnies that run free newsletters provide biased data as they earn there money form the companies they promote. They will often by paid by the companies they promote with stock options. So if they promote the stock well enough they can sell their options as the price rises therefore making money at your expense.
Premium Newsletter can be a reasonable source of good information, but you have to research the track record of the person providing the tips. Ensure they beat the market year after year. At least 90% of stock tippers do not beat the market regularly.
Be your own Stock Analyst.
We recommend the best way to improve your profits and success in the market is to invest in yourself and make your own decisions. When it comes to your own money, you can only trust yourself. Make a good investment in stock market education and spend the time to use Fundamental and Technical Analysis to make informed decisions in the stock market.
For further reading I highly recommend the book Full of Bull, by Stephen T. Mclennan
