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Better Stops Make Better Trades

Better Stops Make Better Trades

Over the last 10 days, the Average True Range (ATR) of a 60-minute bar in the NASDAQ futures has increased from around six points to 18 points. Why might this be important to know, even if you don’t trade that particular market? You may have heard the phrase “More is different.” It means that incremental changes can make a qualitative difference, not just an arithmetic difference. An example...

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Buy The February E-Mini S&P 500

Buy The February E-Mini S&P 500

In the last FOMC meeting of the year, the Federal Reserve decided to leave in every observer’s favorite phrase “considerable time.” When the Fed says “considerable time,” it reminds me of being a kid, asking your parents for something and getting the reply, “maybe later.” Maybe later? What does that mean? Is it yes or no and when is later?  The Fedspeak translator 2014 still hasn’t told me...

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I Don’t Have Anything To Say About The Market Today

I Don’t Have Anything To Say About The Market Today

Every work day, I read the news, watch the market, write what I write, and I generally do it with a dispassionate, objective view. Some days, though, my dispassionate view is challenged, but I get past it. Other days, such as yesterday, I read about an action so cold, I cannot put my compassion away; I cannot look the other way. My objectivity goes out the window and I just want to scream....

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Soybean Rally On January Crop Report

Soybean Rally On January Crop Report

Last Thursday’s weekly US export-sales report is a weekly gauge of demand telling us how much of each grain was sold last week for future shipment.  Index and trend following funds use these reports to determine whether the US is over-selling or under-selling grain in the current marketing year.  The marketing year for US corn and beans is September 1st to August 31st.  To date, 80% of the...

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How To Trade A Gap Up

How To Trade A Gap Up

On December 12, 2014, Adobe Systems (ADBE) gapped up on earnings to $74.17.  The stock closed the prior day at $69.74.  Now, the novice trader might think that the stock was moving up too much and therefore he or she should short it, while the experienced trader would want to look long for a bigger move. This is where experience pays off. Questions To Ask The first question I ask myself in...

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Buy The S&P 500 For Profits In 2015

Buy The S&P 500 For Profits In 2015

Recent economic, global and geopolitical events have put traders on edge. A plethora of negative news items have allowed the bulls to box themselves into a corner in the “wall of worry”. The good news is that the S&P 500, the stock market, and US economy are set to surge in 2015. This means that now is a good time to be looking at stocks and getting long the broad market. Worries...

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Yes, These Are Uncertain Times, But ...

Yes, These Are Uncertain Times, But ...

Man-oh-man, the battle is raging now. The push and pull between the bears and the bulls is both riveting and disconcerting. It is like the moment of passing a car crash – you are compelled to look even though you know you are looking at potential pain and suffering. At one point today, the Dow was well over 200 points and in this moment, this very moment, it is struggling to stay in the...

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SPX 1540 Target – Don’t Count It Out

SPX 1540 Target – Don’t Count It Out

When we are in an environment where traders are “All in” or “All out” and price is moving at warp speed, you have to shorten your time horizon. There are specific time periods where you can buy and hold and do very well, but, from what I am seeing, that period is gone. Elliot Wave (EW) counting has become very popular in the trading community. I am not going to make this an Elliot Wave...

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Loss Of Momentum Signals Caution

Loss Of Momentum Signals Caution

The drubbing in the stock market last week was hard to watch, but as things stand, there isn't any evidence to suggest it's more than a dip within an uptrend. And the S&P 500 has quickly come to a natural point for a recovery to occur. Specifically, price has reverted to the weekly mean (20-week simple moving average), as you can see via Bollinger Bands.   In uptrends, it's common for...

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Be Patient, Let The Market Do Its Thing

Be Patient, Let The Market Do Its Thing

Wow! How inconsiderate is the market? So close to Christmas and it decides to start acting out. Doesn’t it understand Santa knows who has been naughty and nice? Aside from that, the market dropping so harshly right now takes money away from folks, which means they have less money to spend on their tiny, beautiful, cute children.   U.S. manufacturing output recorded its largest increase in...

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SPX: Is This Finally The Break The Bears Want?

SPX: Is This Finally The Break The Bears Want?

The S&P 500 Index (SPX) of large cap stocks has just finished its worst week in three years – down 65.23 points for a net weekly loss of 3.15%. It lost 1.6% on Friday alone. Look out below. The bears have been waiting for something like this for more than a year. In a market that has tripled in value since 2009, and which has now gone 68 months without a 20% correction, the law of...

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Watch The VIX

Watch The VIX

The movement in the VIX is something to pay close attention to, as it can provide an important warning of potential trouble for the stock market.  The chart below is a long-term look at volatility and the S&P 500.  The black line shows the S&P 500 Index and the red line shows the S&P Volatility Index. Note the last period of sustained low VIX (from the years of 2005 - 07) that...

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Get Longer If You Can – Now Is The Time

Get Longer If You Can – Now Is The Time

I must admit, I did not see this coming. No, I suspected the market would tank today after the nonsense came out about the Republicans shutting down the government via not passing a spending bill. It is that nonsense I did not see coming. The last I heard several days ago is that Mr. Boehner would not let it happen, yet … So, here we are with a market that is falling hard, right along with...

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Why Lower Crude is Not Positive Across the Board

Why Lower Crude is Not Positive Across the Board

Since the big drop after Thanksgiving we’ve been fed a steady diet of untruths about how positive the drop in crude is for the economy and consumers.  The latter may be true as it starts costing less to fill up our tanks and we have ore discretionary income to spend, but the collateral damage done to corporations and nations has far-reaching ramifications.   The US has made tremendous...

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Prospect Capital –The Insiders Are Backing Up the Truck

Prospect Capital –The Insiders Are Backing Up the Truck

Prospect Capital Corporation (PSEC) got off to a rough start this month with a dividend cut. Prospect Capital cut its dividend to 8.33 cents per month from 11.1 cents. But even after the reduction, PSEC sports a dividend yield of 12.1%. Not bad. A 12% dividend is nothing to take lightly. Given that U.S. stocks are priced to deliver flat returns for the next 7-10 years, it’s never been more...

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