S&P 500
1964.58
+13.76 +0.70%
Dow Indu
16805.41
+127.51 +0.76%
Nasdaq
4485.20
+32.41 +0.72%
Crude Oil
81.01
-0.77 -0.95%
Gold
1231.40
+0.09 +0.01%
Euro
1.2671
0.0000 0.00%
US Dollar
85.724
-0.108 -0.14%
Strong

Don't Get Ruined by These 10 Popular Investment Myths (Part V)

Interest rates, oil prices, earnings, GDP, wars, terrorist attacks, inflation, monetary policy, etc. -- NONE have a reliable effect on the stock market

By Elliott Wave International

You may remember that during the 2008-2009 financial crisis, many called into question traditional economic models.

Why did the traditional financial models fail? And more importantly, will they warn us of a new approaching doomsday, should there be one?

This series gives you a well-researched answer.

Here is Part V; come back soon for Part VI.

Myth #5: "GDP drives stock prices."

By Robert Prechter (excerpted from the monthly Elliott Wave Theorist; published since 1979)

Surely the stock market reflects the nation's Gross Domestic Product. The aggregate success of corporations shows up as changes in GDP. Stocks are shares in corporations. How could their prices not reflect the ebb and flow of GDP?

Suppose that you had perfect foreknowledge that over the next 3 3/4 years GDP would be positive every single quarter and that one of those quarters would surprise economists in being the strongest quarterly rise in a half-century span. Would you buy stocks? [Read more...]

Weekly Futures Recap With Mike Seery

We've asked Michael Seery of SEERYFUTURES.COM to give our INO readers a weekly recap of the Futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.

Crude Oil Futures

Crude oil futures in the December contract are down $1 at 81.00 a barrel trading far below their 20 and 100 day moving average settling last Friday at $82 down about $1.00 for the trading week hitting new multiyear lows as the oversupply situation continues to pressure prices to the downside. The chart structure in crude oil was terrible at the time of the breakout as I’ve been sitting on the sidelines, however I have not been recommending any type of bullish position in this market as I do think prices are headed lower and if you are short this market I would place my stop above the 10 day high which currently stands at 85.13 as the chart structure is improving dramatically on a daily basis as a strong U.S dollar and record U.S supplies continue to put pressure on prices here in the short term. The fact that prices don’t have the giant spike ups due to the fact of turmoil in the Mid-East is a great thing as the United States in my opinion does not rely on Mid East oil like we used to so continue to sell rallies while placing the proper stop loss at 85.13 which is around $4,000 or $4 from today’s price levels as there is a high possibility that prices will trade down to the $75 level or even lower especially if the supply situation increases over the next several months as we are entering the non-demand season of winter. Saudi Arabia last week announced that they will not cut production as they are trying to squeeze U.S refineries to slow down their production because of lower prices hurting margins, however it doesn’t seem to be working at the current time as the trend is your friend in the commodity markets so continue to short this market.
TREND: LOWER
CHART STRUCTURE: IMPROVING
[Read more...]

Trade with a Plan – Setting Your Limits

If you follow our blog, then you are definitely familiar with trader Larry Levin, President of Trading Advantage LLC. We have gotten such a great response from some of his past posts that he has agreed to share one more of his favorite trading tips as a special treat to our viewers. Determining the direction of the market can be tricky and just plain confusing at times, but Larry’s expert opinion keeps it simple and straight-to-the-point.

If you like this article, Larry’s also agreed to give you free access to his weekly trading tip.

Today he’s going to talk about how setting your limits can help you avoid sabotaging yourself.

I think trading with a specific plan is one of the most sensible things a trader can do. It helps you learn and identify key areas to watch for in a market. More importantly, it helps you avoid sabotaging yourself because it helps keep your emotions in check. One of the key components of a trading plan is knowing your exits. One way to close an open trading position is with a limit order. [Read more...]

In The Week Ahead: No Clear Sign Of A Market Bottom

All major U.S. stock indices finished in the red again last week except for the Russell 2000, which gained 2.8%, reversing the pattern that we have seen for most of this year where small-cap stocks lag the market. This emerging strength in small caps may be a good sign for the market between now and year end. But, for now, the broad market SP 500, blue-chip Dow industrials and tech bellwether Nasdaq 100 are all negative for 2014 with no clear sign of a bottom in sight.

All sectors of the SP 500 posted losses last week except for industrials, materials and utilities. One potential bright spot is that my own ETF-based metric shows the biggest inflow of investor assets last week went into energy. Should this continue, it may be a leading indication of a fourth-quarter buying opportunity in this downtrodden sector. Stay tuned.

Keep Your Eyes Focused on Europe

In last week's Market Outlook, I discussed a bearish head-and-shoulders formation in Germany's DAX index that targeted an additional 11% decline to 7,800. I said the positive long-term correlation between the DAX and the SP 500 implied that the broader U.S. market may also be vulnerable to more weakness.

Despite last week's modest rebound, the 7,800 downside target remains valid as long as the March 14 and Aug. 8 lows near 8,913 loosely contain the index on the upside.

The next chart shows the SPDR Dow Jones Industrial Average ETF (NYSE: DIA) broke down last week below the $165.51 support level that I first identified in the May 12 Market Outlook. The ETF has key resistance at $165.63 to $168.78, which contains the 200-day moving average (major trend proxy), the 50% and 61.8% Fibonacci retracements of the Sept. 19 decline, and the 50-day moving average (minor trend proxy). [Read more...]

Article source: http://www.streetauthority.com/node/30487118

4 Lessons From Buffett That Every Investor Needs To Know

By: Eric Winter of Street Authority

Behind each trade or investment, they are there... lurking, waiting to reveal themselves during a moment of weakness.

They are the four fears of investing.

I learned about these early into my trading career, and I've been a victim of each one over time. All drama aside, they affect every investor or trader who actively manages his or her own money.

In no particular order, the four fears are as follows:

1. Fear Of Loss
2. Fear Of Missing Out
3. Fear Of Letting A Profit Turn Into A Loss
4. Fear Of Being Wrong

Despite their prevalence, there are fortunately many methods to help conquer each of these fears. One of these tools comes from the long career and immortalized wisdom of the Oracle of Omaha himself.

While I can't be 100% sure what Warren Buffett would say in regard to each of these problems, we can use his bank of interview quotes and newsletter excerpts to infer what the billionaire would say about understanding and conquering each problem. [Read more...]

Article source: http://www.streetauthority.com/node/30486500

Don't Get Ruined by These 10 Popular Investment Myths (Part IV)

Interest rates, oil prices, earnings, GDP, wars, terrorist attacks, inflation, monetary policy, etc. -- NONE have a reliable effect on the stock market

By Elliott Wave International

You may remember that during the 2008-2009 financial crisis, many called into question traditional economic models.

Why did the traditional financial models fail? And more importantly, will they warn us of a new approaching doomsday, should there be one?

This series gives you a well-researched answer.

Here is Part IV; come back soon for Part V.

Myth #4: "Earnings drive stock prices."

By Robert Prechter (excerpted from the monthly Elliott Wave Theorist; published since 1979)

This belief powers the bulk of the research on Wall Street. Countless analysts try to forecast corporate earnings so they can forecast stock prices. The exogenous-cause [i.e., news-driven -- Ed.] basis for this research is quite clear: [Read more...]

Weekly Futures Recap With Mike Seery

We've asked Michael Seery of SEERYFUTURES.COM to give our INO readers a weekly recap of the Futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.

Crude Oil Futures

Crude oil futures in the November contract had a wild trading week in New York currently trading at $83 a barrel after settling last Friday at 85.82 as prices actually breached the $80 mark before reversing in yesterday’s trade to settle down nearly $3 for the trading week. Crude oil futures are trading below their 20 day and $13 below their 100 day moving average telling you the trend is clearly bearish and if you are short this market place your stop above the 10 day high which currently stands at 90.75 and that stop will be lowered on a daily basis as I missed this market and am currently sitting on the sidelines as the chart structure was awful when the breakout occurred so I’m kicking myself at the current time. I definitely am not recommending any type of long position in crude oil as I think prices will continue to head lower especially with Saudi Arabia coming out stating that they will not cut production as they are looking for lower prices to squeeze U.S output as this market still has further to go in my opinion and 79.78 in yesterday’s trade will be retested once again so continue to take advantage of any rally making sure you place the proper stop loss also maintaining a proper risk management of 2% of your account balance on any given trade. Crude oil prices have dropped from $104 a barrel in late June to today’s price levels dropping over $20 or 20% as consumers will definitely benefit when they hit their local gas stations and that should also help improve the U.S economy. The fundamentals in crude oil are extremely bearish as worldwide supplies are extremely high while supplies here in the United States are at record highs so it’s very difficult to rally as we don’t have the spike up in price like we used to when Middle East conflicts erupted which is a good thing for the United States.
TREND: LOWER
CHART STRUCTURE: POOR
[Read more...]

Five Ways to Stay Focused In Scary Markets

If you follow our blog, then you are definitely familiar with trader Larry Levin, President of Trading Advantage LLC. We have gotten such a great response from some of his past posts that he has agreed to share one more of his favorite trading tips as a special treat to our viewers. Determining the direction of the market can be tricky and just plain confusing at times, but Larry’s expert opinion keeps it simple and straight-to-the-point.

If you like this article, Larry’s also agreed to give you free access to his weekly trading tip.

Today he’s going to talk about staying focused in scary markets.

In the fallout from the 2008 global financial crisis, there have been moments that have been driven by pure fear. These are the moments when it can be hard to maintain your composure and trade your plan. Unfortunately, these big days are the times when you need that composure the most. Here is a quick lesson in why it is important to keep focused in a scary market and how to achieve that focus.

Market Basics

First let us understand some market basics. Markets exist to facilitate trade. From moment to moment the market offers traders the opportunity to profit from price movement. It's an environment where every trader has the freedom to create his own results, i.e. all the choices and the power to exercise those choices reside with the trader. [Read more...]

Dividend Investors Rejoice: Falling Markets Mean Rising Yields

By: David Sterman of Street Authority

In the early stages of the bull market, investors flocked to companies with steady and growing dividends. Yet, since the market began to think about an eventual rise in interest rates back in May 2013, this asset class has lost a bit of luster.

The concerns were quite logical: A steady rise in fixed-income yields naturally reduces the appeal of relatively riskier stocks.

But the emerging economic crisis in Europe changes everything. It's increasingly apparent that European economic troubles are here to stay for quite some time, which is likely to keep a lid on global interest rates. It's a bit of a goldilocks scenario for the U.S. economy, as low rates will help our economic recovery to expand without a rate rise headwind.

You would suspect that the pullback in interest rates would help provide support to dividend-paying stocks, but many of them haven't been able to escape the recent market rout. If you've been tracking divided payers but found their dividend yields to be too skimpy, you're in luck. The market slump pushed many 2% yielders into the 3% range, many 3% yielders into the 4% range, etc. In the context of falling fixed income yields, such dividend yields are now comparatively appealing again. [Read more...]

Article source: http://www.streetauthority.com/node/30486109

The Winners And Losers Of The Perfect Storm Hitting Oil Prices

By: David Sterman of Street Authority

When it comes to commodities, you'll usually find a set of countervailing forces that keep prices at an equilibrium. Yet when it comes to oil, all of the factors behind price swings are heading in the same direction.  As oil prices head lower yet, investors will feel both pain and gain -- depending on the make-up of their portfolios.

A Perfect Storm

For much of the past year, a barrel of West Texas Intermediate Crude fetched around $100 a barrel on the spot market. Yet since late July, a series of factors have conspired to push prices lower:

-- A rally in the dollar, which tends to push all commodity prices lower.

-- A further slowing in the European, Japanese and Chinese economies, which crimps demand.

-- A surge in output in Libya to 800,000 barrels a day, up from 240,000 barrels a day in June amid civil war skirmishes near key oil installations.

-- An oil production surge in Russia, which is back at peak post-Soviet era levels.

-- A rapidly rising output in Kurdistan as new key oil installations come on line.

-- OPEC's recent inability to curtail production as much as the market had hoped, leading to talk that this cartel may be weakening as market share becomes more important than pricing discipline.

Of course, the elephant in the room is the United States, which is single-handedly disrupting the global supply and demand trends on a massive scale. U.S. oil production has already surged from five million barrels a day in 2008 to 8.5 million barrels a day in August 2014, according to the Energy Information Administration. The more we produce, the less oil we import. Analysts at Citigroup note that oil imports are now nine million barrels per day lower than they were in 2007. It’s important to note that some of the reduction is due to a drop in consumption as we now drive more fuel-efficient cars. [Read more...]

Article source: http://www.investinganswers.com/investment-ideas/commodities-precious-metals/winners-and-losers-perfect-storm-hitting-oil-prices

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