Author: The INO.com Team

Choppy Action and a Dead Cat Bounce

Posted on by The INO.com Team

This week has been one for the history books and it's not over with yet, we still have today's action to contemplate. So what has the market really accomplished this week? Well, it has frustrated both the bulls and the bears, that's for sure. It's hard to believe that after all of this chop that the Dow is only up 1.18% for the week if it closes where it is currently trading (and less than that on the S&P 500).

What does all of this choppy action mean? Has the market topped out? Is this a "dead cat bounce"?

Let's just let all the dust settle and see what is going on in the major indices for the week and the month.

Last week the major indices closed at: Continue reading "Choppy Action and a Dead Cat Bounce" →

Selling This Fierce Bear Market Rally With Options

Posted on by The INO.com Team

Yesterday, Todd Gordon of TradingAnalysis.com went on CNBC and told Melissa Lee that the NASDAQ could drop 30%. And today's short squeeze is setting up as a classic bear market rally and we're into the trade. Let Todd take you "inside" the charts and his trading account to show you how he's trading it with options.

Learn more about TradingAnalysis.com here.

Plan Your Trade, and Trade Your Plan,
Todd Gordon

Poll: Are You A Buyer Or Seller?

Posted on by The INO.com Team

Don't be surprised if the stock market stabilizes or bounces back in the next few days. The markets are due for a short-term rally after the dramatic drop of the last six days. This usually happens after a sell-off. But, buyer beware. Anyone who automatically assumes this is another easy "buying opportunity" should do so with caution. I don't think this is over yet and here are a couple of reasons why:

1. We are still waiting on the Fed to announce if they will raise rates in September.

2. China's stock market extended its steep losses as lower interest rates failed to halt a $5 trillion loss.

Will the market head higher or lower from here? No one really knows, but we are certainly in for a volatile ride for a while I suspect. That leads me to a simple poll question today...

Are you a buyer or seller?

View Results

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As always, take a moment to vote and leave a comment on the markets. I'd love to hear what you have to say.

Every Success,
Jeremy Lutz
INO.com and MarketClub.com

Beware Of Dead Cats

Posted on by The INO.com Team

Whether we like it or not, the markets made history with yesterday's 1000+ point swing in the Dow. We've also never seen three days in a row where this index has lost 300 points each and every day. So what does all this mean? What it underscores is just how fragile the world markets are at the moment and the general uncertainty and concern that investors have in the U.S., Europe and Asia.

At the moment, China is writing the script and with today's announcement of yet another cut in interest rates I don't see how China can win no matter what it does. It is very hard to bring back investor confidence and trust to the markets once it has gone. I think the loss of confidence has already happened in China and no matter what the government does, it is not going to be enough to bring it back any time soon.

The fact is, the government of China is in a lose-lose position no matter what they do and they have just brought this upon themselves. I do not expect the Shanghai index to rebound in a sustained manner anytime soon.

I'm not sure who created the phrase "dead cat bounce" and how it relates to the market, but it goes like this. When a market has had a pronounced move down like we've just seen in all the major indices and in many stocks, it's not unusual for the market to rebound. Professionals call this a "dead cat bounce" and it is not to be trusted as it does not change the previous negative direction of the market. It is simply a rebound, possibly caused by news or a short covering rally. Continue reading "Beware Of Dead Cats" →

It's Over!

Posted on by The INO.com Team

Monday, August 24th will long be remembered by investors as the day the world turned red. Every exchange in the world is showing big losses. It all started in China when the Shanghai index closed down 8% for the day, its biggest daily loss since 2007. The drop in China quickly moved over to Europe where the FTSE 100 and other major indices all lost upwards of 4%.

What happened?

The experts and pundits will all point to different reasons why this happened, but the reality is, the market has been having problems for some time and those problems have manifested themselves in the minds of investors who suddenly perceive things as being not so rosy.

I have said many times before that markets tend to slide faster than they glide. Simply translated, that means they go down a lot faster than they go up and we have certainly seen that in the last week or so.

One of the strongest market movers for any market is perception. Perception suddenly took a very negative turn this past week for most of the major indices. We have a lot to be thankful for as the Trade Triangle technology warned us on 6/30/15 that the markets were beginning to change direction. I pointed this out on Friday in my video and showed the long-term trend line that goes all the way back to 2009 when the lows were seen in the market. At the time of my video, the Dow was down around 160 points and was very close to breaking the below this long-term trend line. As the day progressed, that support line was clearly broken with the Dow closing down over 500 points for the day. The breaking of this long-term trend line is a big deal, in my opinion, and it represents more than just a correction in a bull market. Continue reading "It's Over!" →