Author: The INO.com Team

Reversion To The …. Blown Account

Posted on by The INO.com Team

The markets have been trending nicely of late and one could argue it has been since the beginning of the year. For those who aspire to use the most over-hyped phrase in trading, ‘the trend is your friend’, the markets have provided some interesting trading opportunities, even if you couldn’t catch them all.

On the other hand, different trading styles are having a tough time of late. Strategies using a ‘reversion to the mean’ concept can at times be like trying to catch a falling knife.  Day traders using tools such as Bollinger bands, keltner channels and even some market profile concepts are finding winning trades to be a tough go. These methodologies that some diehards claim to be an ATM machine during summer doldrums or December holidays are finding it frustrating of late and landing continuous stop-losses due to a failure of price to reverse.

The challenge I see when mentoring traders is their inability to identify the type of market as well as  adjust their trading style when they do recognize them. Traders tend to be loyal to their strategies; just like a dog to their master. Why not? These methodologies have proven beneficial to them over time. Continue reading "Reversion To The …. Blown Account" →

How a phony tweet and computer trades sank stocks

Posted on by The INO.com Team

For a few surreal minutes, a mere 12 words on Twitter caused the world's mightiest stock market to tremble.

No sooner did hackers send a false Associated Press tweet reporting explosions at the White House on Tuesday than investors started dumping stocks eventually unloading $134 billion worth. Turns out, some investors are not only gullible, they're impossibly fast stock traders.

Except most of the investors weren't human. They were computers, selling on autopilot beyond the control of humans, like a scene from a sci-fi horror film.

"Before you could blink, it was over," said Joe Saluzzi, co-founder of Themis Trading and an outspoken critic of high-speed computerized trading. "With people, you wouldn't have this type of reaction." Continue reading "How a phony tweet and computer trades sank stocks" →

Today's Video Update: Can We Trust This Market?

Posted on by The INO.com Team

Hello traders everywhere! Adam Hewison here, President of INO.com and Co-creator of MarketClub, with your mid-day market update for Wednesday, the 24th of April.

Can We Trust This Market?
A number of years ago when Ben Bernanke took over the chairmanship of the Fed, little did anybody predict that he would be single-handedly supporting the entire stock market. I asked several colleagues of mine over the past few days, "what would happen should the quantitative easing that Ben put in place stop?" They all gave me the same answer, "the market would crash." That is not a particularly compelling reason to own stocks, in my opinion, if stocks are been artificially held up. I have said this before, the trend is your friend, and as far as the DOW is concerned, the trend remains positive.

What Now Apple?
Yesterday, Apple (NASDAQ:AAPL) announced their earnings and while there was some good news, there was also some bad news. The bad news is that their profit margins continue to shrink and that coupled with no new innovation coming out of Apple anytime soon, does not spell out a particularly rosy scenario for this stock. Continue reading "Today's Video Update: Can We Trust This Market?" →

Is Gold as an Investment Finished?

Posted on by The INO.com Team

Before delving deeper into that question, perhaps we should see what the mainstream media thinks.  In fairness to the MSM, we note there are plenty of articles on both sides of the debate.  Yet there has been some media piling-on since the recent hard breakdown in gold.  The aptly named Howard Gold explains:

The Case for Owning Gold Has Collapsed; Yellow metal could be headed much, much lower .

Gold could be headed not much lower, but much much lower.  This was written on April 18, when the value assigned to the monetary relic (AKA its nominal price) resided at $1391 per ounce.  So be warned, Mr. Gold advises that gold could go much much lower.  Gold bugs take heed; Mr. Gold himself has put the double ‘much’ whammy on you!

After critical support at 1524 was lost our first downside target of 1440 or so was sawn through like Balsa Wood.  Okay fine.  For those who micro manage every tick in the price of gold (I am not one), then here is the situation; the current little rebound must extend back up to and through the broken support level at 1440 or the next target in the low 1200’s is up next. Continue reading "Is Gold as an Investment Finished?" →