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Showing Posts 1 - 15 out of 62 found.

A New Market Pattern – Crazy, Right?

I am seeing a general pattern in the market as of the last ten days and it is shaped like a skier climbing a semi-steep hill then skiing down a 30-degree slope, then coming up to a ski jump, going off, landing, then shooting off a cornice virtually straight down the face, then skiing across the flat, then climbing a small but steeper hill, dropping down a short face, then a climb up, a climb...

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Up and Down and Still We Go

A wider range, yup, that is what I wrote last week. The only thing that has happened since the market hit more record highs recently and then unceremoniously dumped last week is that it will now trade in a wider range (1955-2010 on the S&P). And so it goes, the volatile market is going down today after it went up on Friday. What is more interesting, though, is the big fall the major...

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US Dollar Breakout: End To Stock Bull, Renewed Commodity Bear

US Dollar Breakout: End To Stock Bull, Renewed Commodity Bear

It seems nothing can stop the U.S. dollar. Since its low in April it has closed higher in four out of five months and is up almost 8.00% since then.  While a run like that is in need of a rest there are some big issues that need to be considered now. DXY broke out of a six-year triangle this month. Breaking to the upside from a triangle is bullish. That triangle is essentially a six-year...

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Economic Conditions and the US Consumer Are Still Good

Honestly, it is nice to have yesterday behind us, even if I get it. Even if I understand this has to happen now and again, it bothers me, which I find interesting. The big sell-off for no apparent reason bothers me for two reasons. The first is I abhor irrational behavior and yesterday’s sell-off was irrational.    US shares closed sharply lower, dragged lower by Apple, which slipped 3.8%...

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We Cannot Will The Market To Meet Our Needs

We Cannot Will The Market To Meet Our Needs

Patience is a virtue, but in these markets we are in the land of instant gratification.  We wanna get paid and then step aside before the fall.  That of course is market timing, something traders ultimately meet with failure.  Why is that?  Because you have to be right in getting in/out/in/out over and over again.  Nobody can time it right perfectly, and when you are out of the market how...

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An Entropic Market Obeying the Laws

What goes up must come down. For every action, there is an opposite and equal reaction. Yup, I am referencing fundamental laws of the universe, Newtonian Physics, if you will. Well, actually the first maxim is a colloquial offshoot of the law of gravity, but it works. Just look at the market today. The price-action is huge and the movement is down, way down. My-oh-my, things can change...

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Ride Out the Volatility, It Will Settle Down

Financial writing does not have to be staid, flat, or dull; it can be colorful, and it often is. Last week’s new highs have been greeted with nothing short of a smack-down as talk of the “death cross” in the Russell 2000 and a potential “Alibaba top” have dominated the discussion on trading desks. I guess the same could be said for market technician terminology, as it relates to charting....

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Options Watch: Amgen At Key Price Point

Options Watch: Amgen At Key Price Point

With the continued deterioration of market breadth, it's becoming more difficult to stay long in this market. It's also not the best risk/reward anymore to buy breakouts, but instead wait for pullback plays and support to buy into.Amgen (AMGN) is a large cap biotech stock that has seen great relative strength over the past few days. After a clean breakout above 140, it has since pulled into...

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Why Bull Markets Are Dangerous To Your Financial Health

Why Bull Markets Are Dangerous To Your Financial Health

This statement may sound paradoxical… it is intended to. It only applies to active traders, so if you are a long-term investor who doesn’t time the market, you can skip this article. [Editor's note: Read another story by Dr. Kenneth Reid: The Five Trader Personality Types—Which One Are You?]For the rest of you, bull markets are a slippery slope psychologically, because the dangers lurking...

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One Of The Deadly Sins Of Trading: Not Using A Stop-Loss

One Of The Deadly Sins Of Trading: Not Using A Stop-Loss

A year ago I was working with one of my coaching clients and he sent me an e-mail title, “Forget your Fears.”  I opened the e-mail up and he said that he had been trading with a new method.  The new method was not to have a stop—period.   Basically, he would find a trade setup and if he was wrong and the trade went against him he would start to work his average by adding more shares into the...

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The Market is Just Being the Market

Yesterday seemed to be an alarm bell for the bearish clan. Sheesh, give em a triple-point drop on the Dow and they all wake up screaming. I read one technical analysis this morning … well, here is the title, BEARISH WEDGE: COULD THE DOW DROP 1000 POINTS? I understand in theory technicians are not bears or bulls; they simply read the charts and then report what they see, but I have to ask the...

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The Floor and Ceiling Change, But The Wall Remains The Same

Here we go again … Another crisis of confidence, even as the penultimate geopolitical event unwinds from open hostility to verbal aggression. Russia and Ukraine seem to be moving toward some sort of pact that will bring some peace to that region. So what? That news is so last week anyway. How about that China, then? Seems it never loses its power to contribute to the constant wall of worry...

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Something’s Happening Here …

It’s official. I am joining the “wary” camp. As the song goes, “There’s something happening here / what it is ain’t exactly clear …” Yup, I had to go back fifty years for that line from a Buffalo Springfield tune, but the sentiment expresses my new-found wariness about the market. Primarily, my wariness stems from overheating, too much too fast, and chew fifty times before swallowing. The...

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Fear Is Not Rational: The Limitations Of The VIX

Fear Is Not Rational: The Limitations Of The VIX

Most of us as traders and simply as human beings seek clarity.  We innately feel the need to make sense out of chaos.  We want answers.  We want black or white.  Gray makes many of us uneasy.  So, there are often times when faced with the complex world that is trading, we want to boil things down into one universal truth, a methodology that we can apply wherever we go. Problem is we often...

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Can the Market Hold On At This Altitude?

Okay, so I suggested yesterday that Tuesday’s market move was a bit exaggerated for both the current climate and the “news” about the Fed. I must admit, the buying that happened yesterday seemed a bit stronger than warranted. The lack of follow-through yesterday (even after the FOMC notes came out with the language the market supposedly likes to hear) suggested a soft bullishness, a lack of...

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