Archive for Market Analysis
Upside Break Out On US Markets – VIX Dropping
Posted 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.
Liberated Stock Trader – Excellent Customer Satisfaction Results
Posted by: | CommentsA 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.
2011 Member Survey Is Out – Tell Us What You Think.
Posted 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
Posted 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.
A Bad Time To Be Bullish In The Market
Posted by: | CommentsJust a quick update to yesterdays article.
After yesterdays near massacre on the global markets, the only conclusion to make is “it is a bad time to be bullish”.
European Debt Crisis
With governments toppling and debt problems spiralling in Portugal, Spain, Greece, Ireland and now most crucially Italy, there seems little hope for a positive end to this fiasco. Weakening of the Euro by pumping in extra cash only after the implementation of excruciating austerity measures can be the only outcome. For me the market bias is down for now, and it is near impossible to make any money in the market at the moment.
Market Outlook
The market will let us know when the right time to invest is. When the volatility on the VIX (CBOE Volatility Index) drops and the market begins a steady ascent will be the right time. Look out for the S&P500 dropping below 1225 (like it almost did yesterday) this will be very bearish with the next real support level at 1125 (almost 10% lower).
Watch your backs people the next days and weeks will be a bumpy ride.
Stock Market Crash – An Early Warning System
Posted by: | CommentsDeveloping a system to detect a stock market crash
During these volatile times when no-one really knows which way the market is going to turn, it becomes increasingly important to formulate your approach to the general market. If the market crashes, it does not really matter what stocks you have bought they will get dragged down too.
Wouldn’t it be nice if you had some sort of early warning system to let you know that there may be a serious crash coming?
I have spent quite some time developing a system that will warn me when a potential crash is coming. Also, the system will also warn me when there is a shock in the market (usually a precursor to a crash). I have even developed a system which will alert me to potentially good opportunities to get back into the market.
I have back tested it over the last 20 years and it seems to work very well.
Stock Market Crash Detection (click to enlarge)
I have developed this system using Stock Finder from Worden Brothers and it is based on solid technical analysis. Using seven different indicators I am able to accurately spot the conditions that lead to a large stock market crash.
The Chart is Weekly (5 days per bar). As you can see, there are thee indicators below the price history of the SP-500 chart.
- Bear Market Signal (Red) – This signal lets me know when to expect a serious stock market decline
- Shock Event Warning (Yellow) – This lets me know when there has been a shock event in the stock market that affected price considerably
- Bottom Alert – Early Buy Signal (Green) – This indicator allows me to see when the market potentially hits a bottom or is is an excessively bullish mind set
The signals are plotted along the bottom of the chart and relate to the price action in the chart.
How does the Stock Market Crash Detector work?
In November 2000 the system first flags a Bear Market Signal (the first red vertical arrow). Selling all your stocks at this time would have meant you exited the very close to the top of the Dot-Com Bull market (only a 9% off the top). Thus, securing all of your gains except for 9% during the boom. The market subsequently loses 38%
In May 2003, the Bear Market Signal ends and the first true bottom alert is signalled (Green Vertical Arrow). Entering the market here, would mean you would have entered the market again close to 10% of the bottom of the crash, thus maximizing your profit in the coming 2003 to 2007 Bull market.
In February 2008 the next Bear Market Signal is given within 11% of the top of the 2003 to 2007 Bull market. (second red vertical arrow). The market then declines 45%.
The bottom of the Financial Crisis crash is at 666 in March 2009. The first Bottom Alert for this crisis is 5 weeks later in April at 853 points. This enables you to get in early enough to realize the profits of the new bull market which moves up 40% from here.
Important Stock Market Crash Warning
Interestingly, in November 2011 the system also generated a Bear Market Signal. This was due to the volatility and speed of the July to August pullback. However this signal was very brief and has since been replaced with a bottom alert for week commencing November 4th 2011.
But take this as a warning. Although I am long in the market again, the fact that the conditions for a full Bear Market were met just recently, makes be very aware of the possibility for another Bear Market. Considering the situation in Europe and the U.S this could well be a reality. For now I am long until the market tells me otherwise.
Do you want to have the technical analysis skills to develop your own stock market crash detector? If so, then try our Liberated Stock Trader PRO Stock Market Training Course.
