Category: General

Weekly Futures Recap With Mike Seery

Posted on by The INO.com Team

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 Continue reading "Weekly Futures Recap With Mike Seery" →

What's More Volatile, Stocks Or Commodities?

Posted on by The INO.com Team

If you said stocks, you'd be right. There's a big misconception that commodities or futures are more volatile and risky than stocks. The truth is, what makes commodities or futures appear risky is the leverage factor. You only have to margin up a small amount of capital, usually less than 5%, to control a large amount of capital. What that means is when the market moves even a small amount, you get a bigger return, or in some cases a bigger loss, on your money because of leverage. If you put up the whole value of a commodities or futures contract, you effectively de-leverage your investment and at the same time lower your risk and return.

For example, say you want to buy 100 ounces of gold. At the current price, you would have to pay $123,500 and you would own the gold. Instead, you could buy 1 futures contract of gold worth $123,500 and only margin up $4,400. Now let's say we have a $10 move in gold. On 100 ounces that would be worth $1000. As you can quickly see, the return on $4,400 is a heck of a lot higher than the return on $123,500 if you owned the gold outright. Which would you rather have, close to a 25% return on your margin on 1 futures contract, or have a $123,500 tied up in physical gold and see a return of less than 1%?

That, my friends, is why commodities or futures are interesting and can be very profitable when you approach the market with discipline. Naturally, leverage slices both ways and you could lose just as fast as you make money. The key here is to be diversified like our World Cup Portfolio.

Here's the 6 individual markets of the World Cup Portfolio shown quarter by quarter. As you can see, not every market made money every quarter, but combined every quarter was profitable. This underscores the power of diversification and disciplined trading. Continue reading "What's More Volatile, Stocks Or Commodities?" →

How To Beat These Billionaire Hedge Fund Managers

Posted on by The INO.com Team

If beating the billionaire hedge fund mangers seems like a dream to you, then I am about to give you a reality check. Before I go there, let me share with you some of the results of these billionaire hedge fund managers this year. I'm only going to give you the top three, as they have achieved outstanding results.

Let's start off with the number one hedge fund manager of the year. I'm sure you're familiar with this name, as it seems to be in the news every week. I'm talking about Carl Icahn. Icahn has produced an incredible return of 48.96% year-to-date. That truly is an amazing return, but he's not alone. Next up is David Einhorn with a return of 41.37% YTD. Bringing up the rear with a very impressive 27.95% return YTD is Bill Ackman.

I think we can all agree that these three brilliant billionaire fund managers have all produced outstanding returns so far this year. I congratulate all three hedge fund managers. It's even more remarkable when you consider that the stock market hasn't had much sustained movement to the upside this year. In fact, just recently most of the major indices were flat to lower on the year.

This leads me to the main lesson at hand... with the right tools you can surpass the returns of these hedge fund all-stars. Continue reading "How To Beat These Billionaire Hedge Fund Managers" →

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

Posted on by admin

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). Continue reading "In The Week Ahead: No Clear Sign Of A Market Bottom" →

4 Lessons From Buffett That Every Investor Needs To Know

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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. Continue reading "4 Lessons From Buffett That Every Investor Needs To Know" →