Traders' Library Blog

ETFs, Graph Analysis, and Top 5 of '09

ETF Update: Investing in India (A Dash of Insight)

Comparing the US Dollar and SP500 Relationship Since 2007 Peak (Afraid to Trade)

Narrow Based ETFs (Random Roger)

How Volume Determines Intraday Volatility and Opportunity  (Trader Feed)

Top Five ‘09 Stock Sessions (MarketBeat-WSJ)

Learning from bad graphs and weak analysis (Seth Godin's Blog)

The Stimulus Has Stalled (Planet Yelnick)

Playoff picture, scenarios (ESPN)

Retail Poses Possible Opportunity

 By Kevin Grewal, Editorial Director at www.SmartStops.net

Retail Poses Possible Opportunity

Most recent data indicates that U.S. retail sales rose 3.6% from November 1 through December 24 as many loosened the grip on their wallets and spent a couple of extra dollars during the holiday season.

To add to retail’s appeal, the International Council of Shopping Centers expects final holiday sales numbers to increase by 1% from last year and sales numbers for the month of December to jump 2%.  The holiday season, in conjunction with a boost in consumer confidence, increases in disposable income and the loosening of credit markets are all positive forces that should support a favorable trend in the sector.

In fact, a survey conducted by Change Wave Research indicated that 25% of consumers are expecting to spend more money this holiday season than last.  This expected boost in revenues combined with the lean inventory and cost cutting measures implemented by many merchants is likely to add to retailer’s bottom line. 

3 ETFs To Access Europe

By Kevin Grewal, Editorial Director at www.SmartStops.net

As strength in export growth and the Euro helped Europe into an economic recovery, many investors have turned their attention to the continent. 

Growth in Germany and France, two of the largest economies in Europe, helped the Eurozone post a 0.4% GDP growth in the third quarter of 2009 and pave the path to similar growth for the remainder of the year.  Additionally, European economies are benefiting from tight monetary policies and favorable projections in corporate earnings growth.  Lastly, Europe offers investors the ability to diversify by gaining international exposure while the benefits of investing in developed nations.

Although Europe seems to be positioned to emerge out of the global recession, it is equally important to keep in mind that unemployment rates in certain parts of the region are north of 10%, the European credit markets are still relatively tight and wages have remained flat.  To add to these woes, governments in some parts of the region like Greece have overspent which has some speculating that deflation may arise.

What Lies Ahead For Real Estate in 2010

By Kevin Grewal

As the economy starts to show signs of a self-sustaining recovery, many have suggested that the real estate markets have bottomed out, but there are plenty of signs to indicate as uphill battle still lies ahead.

From an optimistic view, real estate is still relatively affordable, consumer spending is trending in the right direction, real disposable income is on the rise, consumer confidence is at a three month high, new home construction is low and home sales are improving.  These are all positive factors for the real estate markets, influence supply and demand forces and generally push prices up.

However, it is more likely that foreclosures and the demise of government funding will put a damper on these positive factors, further hinder the real estate markets.

Number 1 Bestseller of 2009

By John Boyer

1. Market Wizards-Jack Schwager—It is hard to believe that at the top of this list is a title that was first released 20 years ago. Written by a trader, for traders, about the best traders, this book only gains momentum every year. If you haven’t read it, you should and if you have read it, you should read it again. The insight handed out through this entire work reaches deeper than nearly any other work. If you read these interviews every day, you would find some new piece of information or some new perspective that has the potential to transform your trading. A deserving work to be at the top of the list.

Enjoy the holidays and keep an eye on the blog for the new titles that will be on this list next year!

S&P500 Technical Analysis Update Dec. 26, 2009

The index is still making a higher high with also higher bottoms. Meaning the uptrend is intact and the question is if we are now at the top, or is there still room for higher levels? Creating a historical Fibonacci projection from the start of wave {C} and a previous high point, we can see targets that fit quite nice the price evolution. And now we are reaching the 423.6% target. Price was moving up with lower volume, but this is certainly not abnormal the end of the year.

To start the down move of the right part of the rounding top formation I expect price to remain in the trading area between 1125 and 1030 for now, and only moderate price moves.

I would not open any new manual long trade for the moment, because if we are looking at a rounding top pattern, it is about time for the turning point. Breaking the medium term uptrend line might be a first valid indication that the down move is started. This would now be the case with a closing index below 1102.

Most indicators are topping and if turning around now, some will give a negative divergence. The last (C) wave now seems to be complete and with this also the (Y) wave. There is no change in our positions. There is no manual long position open for the moment and SATS2 is still holding the last long position. There is good support at 1085, but if this support breaks I expect a further down move to 1030.

Top 10- Numbers 3 and 2 Announced

By John Boyer

3. The Snowball-Alice Schroeder–A bestseller on many lists, this insight to Warren Buffet’s methods was a huge hit with traders and investors. Unquestionably one of the greatest traders, Buffet will be revered for as long as traders trade.

2. New Market Wizards-Jack Schwager—You could build a mountain out of the trader interview books that have been published over the years, but few have had the impact of the Market Wizards books. The key is Jack’s ability to get beyond the systems and the trading bravado and into the true psyche of the best in the business.

 

THE NUMBER 1 BESTSELLER OF 2009 ANNOUNCED TOMORROW!

Happy Hoildays!

May you all have a safe and happy holiday!

Here is a tune for your listening pleasure!

Top 10 of 2009- 5 and 4 Revealved

By John Boyer

5. Larry McMillan’s New Options Strategy Course—One of the first experts to put effective strategies in writing and unquestionably one of the most read, Larry has helped more traders understand options than probably any other author. This course brings his personality and favorite strategies to life and give traders that nuance you can only get in a live session.

4. Strategies for Profiting with Japanese Candlestick Charts-Steve Nison—The original candlestick master, every charting software and user of the most popular charting technique owes Steve a tip of the hat.  Before this course was created, sessions with this legend were almost impossible to get into. This paved the way for Steve to reach thousands and thousands of traders who have learned from his teaching.

CHECK BACK FOR THE TOP 3 OF 2009!

Top Ten of 2009 by John Boyer

It is that time to declare the Top Tens of everything, but I wanted to make our best of the best list a little interesting. I have pulled the numbers and lined up the top sellers of this year and thought I would give a little bit of info on each one. I’ll post them over the next few days so make sure to come back to see who wins the title of top trading product of 2009.

10. Think and Grow Rich-Napoleon Hill—This is one of the greatest financial books of all time without question. It is interesting to keep in mind the perspective from which it was written. Published in 1937, the US was still clawing its way out of the depression and this masterpiece offered the most important element of that recovery. Hope. Anyone can be successful and this book shows how. Still a huge influence today, its simple, direct advice and tactics are loved by traders and dreamers everywhere.

9. Strategies for Profiting on Every Trade-Oliver Velez—One of the most motivating trading educators in the business, Oliver Velez inspires his students to take action. This title is a perfect example of his ability to break down the trading steps and put his tactics to work improving profits. It is a strong favorite of traders because it make the concepts accessible and easy to act on.

ETFs For 2010

By Kevin Grewal

As 2009 is coming to an end, we have watched the equity markets rally by over 30% and gold hit all time highs.  Additionally, signs of a global economic recovery have emerged and the future of the biotechnology, energy and materials sectors remains bright.

Biotechnology

Despite much uncertainty in the massive healthcare reform bill that is making its way through the legislative process, it is a safe bet to say that some sort of the bill will be passed.  With this in mind, heavy regulation and tax bills will likely hit Big Pharma, but not the biotech sector.  As a result, massive amounts of cash could flow into biotech.  Additionally, not all biotech companies have rallied from March lows and valuations for some are relatively still reasonable.  An ETF to watch is the PowerShares Dynamic Biotech & Genome (PBE), which is up 51% from its March low of $11.03 to close at $16.65 on Tuesday.

“Swing Trading” by Oliver Velez - Customer Review

Swing Trading with Oliver Velez Course Book with DVD received a great review from one of our customers!  Read the full review now!

 “I am a 30-year engineering veteran and trading is fast becoming my next profession. When it comes to problem solving or subject understanding I tend to instinctively look for the cause and affect; the reasons why and why not; the answers to and causes of failure. When I study a topic I want to learn the raw data and information apart from the fluff and wasted information. Oliver explains the rules, laws, and the nature of trading. He elaborates on why events occur and do not and the actions to respond with.

When I screen the market or examine my selected stocks, each stock must satisfy a litmus test to get on my short list. This book has fine tune my style to such a degree that I am overwhelmed with excitement. Oliver does not give you wasted words on a page but rather every word or point he makes really has value. He is concise and to the point yet his teaching style is relaxing, non-intimidating, and non-condescending. Every point that he makes in this book is usable and is vital to your success. The bonus is that he throws in a little comedy every now and then in his examples to keep you motivated.

If you truly want to understand how swing trading works and become a consistent winner then this book is a must have for your library and study.”

3 ETFs To Fight Inflation

By Kevin Grewal, Editorial Director at www.SmartStops.net

 

Despite a slower than expected GDP reading, there are still signs that an accelerated economic recovery will emerge, having many investors betting that inflation will soon loom.

According to Merrill Lynch & Co.’s Treasury Master Index, Treasuries are expected to have their first down year in a decade, which is an indicator that investors are expecting prices to rise.  This is the complete opposite of what was witnessed during the most recent financial meltdown when Treasuries gained an average of 14% and investors anticipated prices to decline.

To further support the notion of inflation, Treasury Yield curves have been widening to record levels.  Most recently, the difference between 2-and 10- year Treasury note yields jumped to 281.4 basis points, from the 145 basis points at the beginning of the year.  Additionally, the yield on the benchmark 10-year note reached its highest level since mid-August. 

"The New Three-Legged Stool" Book Review

The New Three-Legged Stool: A Tax Efficient Approach to Retirement Planning, by Rick Rodgers, was reviewed by www.OurLittleBooks.com this week. Check it out here!

Rick is a certified financial planner and the founder of Rodgers & Associates, named one of the country's top wealth managers by Wealth Manager magazine. He published this book with Marketplace Books earlier this year in order to help families create and conserve their wealth in preparation for worry-free and dignified retirements--a primary goal of his company. To find out more about him and the book, click here.

Thank you to OurLittleBooks.com!

Holiday Shortbread Bites

Happy Holidays! These shortbread bites are a must-have this season. (And they are pretty too!)
ENJOY!

Reprinted from Good Housekeeping!

Ingredients
• 1 1/4 cup(s) all-purpose flour
• 3 tablespoon(s) sugar
• 1/2 cup(s) (1 stick) butter (no substitutions), cold, cut into pieces
• 1 tablespoon(s) red and green nonpareils or sprinkles or 1/2 cup mini baking bits

Learning video: Labeling Elliott Waves

This is the last part about Elliott waves where I will introduce an indicator to help you manually count the waves.

Looking at the long term Elliott count for the S&P500 index with a logarithmic monthly chart, we are in December 2009 most probably close to the end of a long term correction wave B and starting a long term correction wave C. Half 2007 we finished a long term impulse wave up. This means of course also that we finished a very long term impulse wave 1. From there we expect a correction wave 2. This looks like it is going to be an ABC zigzag correction. If this is correct, we can expect very soon a bigger price drop to complete this wave C.

Sylvain Vervoort
http://stocata.org/

S&P500 Technical Analysis Update Dec. 19, 2009

The index stays at the upper part of a tight trading range. Two days ago we had a bigger down move with high volume. The index made a lower top, apparently building the start of the downward move creating the right part of the rounding top pattern. Price moves downward within the pitchfork. For the moment I consider that we are past the highest value of the rounding top.

To continue the right part of the rounding top formation I expect price to remain in the trading area between 1120 and 1030 for now, and only moderate price moves.

I would not open any new manual long trade for the moment.

Indicators are in favor of a further down move. The last (C) wave now seems to be complete and with this also the (Y) wave. There is no change in our positions. There is no manual long position open for the moment and SATS2 is still holding the last long position. First support is at 1085, but if this support breaks I expect a further down move to 1030.

Sovereign Debt May Doom ETFs

By Kevin Grewal, Editorial Director at www.SmartStops.net

The most recent worries about Dubai World and its ability to pay its debts has opened up a whole new can of worms and have many questioning whether or not the delinquencies of sovereign debt could potentially put a damper on a global economic recovery.  

Sovereign debt is the total amount of sovereign bonds, which are bonds issued in foreign currencies, owed to bond holders.  In general, the issue of delinquencies in these bonds, or type of debt, arises when a nation cannot afford to repurchase the necessary foreign currency when the bonds mature and repayment is due.

From a macro perspective, if sovereign debt defaults get out of control, then the flow of global credit is in jeopardy, which will likely put a damper of the entire global financial system.  In addition to this, there are the potential consequences of having political instability and social unrest, which will likely further weaken the global financial system.

December 17, Market Analysis and Trading Plan.

Timely Trades Letter™:

December 16, 2009:

NASDAQ Outlook & Key Trading Levels:

The market continued resting just under horizontal resistance during the first three days of this week. Sluggish movement is normal for the market during the days just before a Fed meeting, but in this case it also continues the recent pattern. On a closing basis the market only moved about sixteen points since the weekend Letter. As noted in previous Letters, this type of market environment does not allow most of the stocks that trigger to run very far; and thus the trading plan calls for trading lightly if at all until the market picks a direction.

Even though the market is sluggish there has been some action under the hood. We saw triggers and profitable moves in three of the accumulation patterns from the last letter, FCFS, DWA, and TSTC. We also saw a profitable move in the HLX hammer pattern, the CREE flag pattern and a couple of the listed pullback patterns. It is good news to see that these powerful setups are able to move even in a sluggish environment. Even though we see some stocks triggering, I continue to focus on protecting previous profits rather than loading up on new positions. A sluggish market like this can break either way quickly.

Velez - The First Rule of Trading

Sneak peek at Oliver Velez's video: The First Rule of Trading....