Candlestick analysis is adorned by some and hated by others. I find candlestick analysis to be a great way to look into the price action of a stock, especially considering I prefer momentum indicators to most others. Looking back through historical data (think October 2007) I found what predicted perfectly the market top. Read more…
There is a new trendline that traders should consider on Monday open. The market has been in a downtrend following the collapse of the financial world and worries of a continuing recession. Many traders are calling for a late year rally as the volatility in the market ebbs and the fears investors. Read more…
With RSS syndication you’ll be able to get updates to your desktop the second a new article is added. I’ve written a short tutorial for adding InvestingBlog.org to your feed reader:
I prefer RSSReader, its simple, doesn’t have many features (which makes it easy to use) and it finds RSS feeds quickly. Other RSS readers cost money or require a signup at another site. This is the best free RSS Reader I have found so far. Read more…
The automotive bailout continues to go through the legislative branches and then to the President for signature. I would have blogged about this when it first appeared that the automotive bailout would come through, but just as expected Republicans in the senate are taking a hardline approach on future bailouts. Senators have lined up to show their lack of support for the $14 Billion bill, which is of course just 2% of what Congress tossed the banks in the $700 Billion bailout.
Ford is the only one of the Big Three refusing government help this time around, perhaps banking on the idea that American’s will buy Ford automobiles to show their support for a company turning down Federal funds. Or it could be that the Big Three will become the Big Two, then the Big Ford when GM and then Chrysler fail due to their own debts. Read more…
The bailout of the banking industry produced a few up and down days of volatility. Half of the trading populace was satisfied with the bailouts while other times traders weren’t quite with it, selling quickly when the initial $700 Billion TARP program was produced.
Now the investing class has to digest a new bailout to the middle class and the entire American populace. It has become apparent that the automotive bailout will go through with ease as many democrats and republicans across the isle are seeing the need to prop up the middle class and their take home wages. The automotive bailout is being pushed to save millions of union jobs in both the assembly of cars and trucks and also to save the businesses that supply the needed parts to the assembly lines. Read more…
Last week it appeared that the Friday surge was enough to break through the downtrend. This Monday disproved that after the Dow and major US indices plunged several percentage points from their opening price to once again fall within the limits of the downtrend and continue the fall. This Friday yielded a very similar result to that of last, but this time could we actually be out of the trend? Read more…
The Treasury publishes the daily yields for their securities. The yield curve is essentially a natural phenomenon that happens when yields slowly rise per annum as the length of the investment grows. The most important part about the current yield curve is that it shows one of the largest divergences between short and long term interest rates. The 1 month Treasury is yielding just 1/12 of the number stated per month, that’s .003% per month, AWFUL.
To make sense of the yield curve lets first take two different investment timeframes and work them out to find out the difference in total return on an investment of $100,000. We’ll use the 1 month and 2 year yields to determine how much more an investor would make by locking up their money for 2 years instead of reinvesting into one month securities over and over. Read more…
Following Japan and the Eurozone, the United States is officially in recession. The National Bearau of Economic Research and its economists determined that in fact the United States is in recession and that it had been since December 2007 just after the housing bubble began to burst.
This announcement prompted Ben Bernanke and Henry Paulson to make statements regarding the response of the FED and Treasury in America’s recession. Ben Bernanke wouldn’t rule out a rate cut but said that they could only do so much. He favored government programs, the recent TARP program and insuring transactions to lower interest rates. Henry Paulson mostly agreed but traders are still pricing in a cut next FED meeting. Read more…
The S&P500 and the DJIA made impressive gains this week after toppling downtrends that have kept the market quiet for the past few weeks. The S&P500 bounced tremendously off its lows with the Dow replicating the trading action though not as strong as most would have hoped. The turnaround was fueled mostly by large selloffs that have priced in virtually no good news from the market. Each news item that comes out if good will bring large bounces while bad news is unlikely to do as much damage. Read more…
From Mastercard to Visa to American Express and Capital One, the credit card companies are going to stage a huge rally. The Fed announced today two new programs that would total $800 Billion of new liquidity to consumer creditors and to Fannie and Freddie. $200 Billion of the new money will be dedicated to consumer credit such as auto loans, student loans, credit cards, and some small business loans. Read more…
Each year investors of all sorts and account sizes utilize their stock losses to rack up huge tax gains. Individuals are able to sell off depreciated stock to offset capital gains. Investors are able to match up however large losses against gains ($50K loss against $50K gain= 0 capital gain and no tax). Investors can also opt to take up to $3000 more in losses than gains, thus resulting in a drop of income by $3000. Any amount above $3000 can be carried over and deducted the next year. Read more…
When comparing PE ratios against their historical averages its easy to see the tech industry as one of the most historically cheap sectors on the market. Single digit and even PE ratios lower than the teens are out of the ordinary for tech stocks which enjoyed triple digit multiples less than a decade ago and up until the market crash this year were trading for 20+ ratios. Read more…
The Dow had a wild trading session after falling slowly throughout the day to eventually rebound back into positive territory. The Dow began the day trading at 7552 and closed at 8046. The spread between the highs and lows were tremendous in terms of points and percentages with a 622 point range from 7449-8071. Read more…
Goldman Sachs has little to stand on now. After falling below its absolute support at $60 per share the stock has little much than one more leg to stand on. Goldman is the same as every other investment bank in the business, it was just better at hiding its assets from the general public and the analysts prying through the books. Read more…
The AP did a great job compiling the total expenditures of the US Government to curb the credit crunch. This chart has it all from individual bailouts to lost tax revenues and FED emergency window loans. The number at the bottom is most startling, $2.6 TRILLION! Read more…
It would be normal to accept a few hundred point loss after the Dow rallied for 889 points today. The close of the market does show some weakness, in that it touched a trendline that has held the market down for the better part of the last month. With no significant movement through the line today, and little evidence the rally is going to continue, the next few days might just kick off a heavy sell off. Read more…
Traders are again pricing in an interest rate cut coming from the Federal Reserve. Apparently a 1.5% interest rate is not low enough, its still 50 basis points from the lowest levels during the Tech bust. The problem is yet again that low interest rates are being used to stoke the flame under the economy, the last time this happened an artificial housing boom was created. Read more…
The volatile market today can tell us a lot about where we might go in the future. The entire day of trading was entirely technical, though the one minute tick chart is largely unfilled due to the amount of volatility in the market. To show how the market moved today, we’ll look at the chart patterns and support and resistance as well as the RSI divergence occurring late in the day that all played a factor in today’s trading. Read more…
The floodgates at the Federal Reserve are now open to the banking industry. With $700 Billion earmarked for the sole purpose of buying up worthless debt, the banking industry and the credit market (at least in the hopes of legislators and Fed chairmen) will turn around to provide liquidity not just to the market but also to average people looking to buy homes, cars or anything else that is traditionally financed debt. Read more…
AIG, beaten on its insurance and credit portfolio will now be bailed out to the turn of $85 Billion of government money. This comes after Merrill Lynch is sold and Lehman Brothers starts brokering its assets for liquidation. The government has provided billions of liquidity through Fed rate cuts, bailouts and even an economic stimulus yet the outlook remains bleak. This is now the second time in one week that federal money was used in a bailout. Read more…
Merrill Lynch is sold to Bank of America, Lehman declares bankruptcy and AIGs cries for more liquidity. Each of these companies represents a dying breed. Merrill Lynch and Lehman are both blowups of more speculative investment banking and AIG has billions of annuity payments and a huge insurance business. The market is going to need a big catalyst soon to create a floor in this market. Read more…
Massey Energy is one of the great plays on coal for numerous reasons. The growth rates the company posts are out of this world, its position in low sulfur or clean coal technologies is second to none and its poised to do well both as coal prices rise and the world population becomes more interested in clean technologies. Not to mention that it has a heavy stake in the sale of metallurgical coal, or coal that is clean enough to use for the creation and preparation of steel. Positioning in metallurgical coal also means a position in emerging markets and steel. Higher prices for steel means higher prices for its coal. Read more…
In a slowing economy you might not think that pawnshops would be the best business to be in, but with huge growth coming from EZCorp, you might think twice about that assumption. First, with a tight economy more people succumb to easy but expensive cash loans from what might as well be known as legal loan sharks. High interest collateralized and non-collateralized loans are proving to be extremely profitable for EZCorp which trades under the ticker symbol EZPW. Read more…
Fujifilm Holdings (FUJI) better known for its cameras than its drugs is making a gradual switch into pharmaceuticals. The CEO is optimistic about the company’s future saying that the company will be able to switch from cameras and chemicals to pharmaceuticals because of the way their current chemical processing works. Apparently the switch isn’t as hard as investors think, at least that is in the eyes of the CEO. Read more…
Inflation is a tough subject to handle and everyone has a differing opinion on how it works. The Keynesian theory, used by the government and the Federal Reserve points out that short term inflation can be a way to spur economic growth. On the flipside, it hurts in the long term by rising prices. Read more…
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