Category: General

2 Tips To Find A Valuable Options Strategy

Posted on by The INO.com Team

By: Tim Melvin

One of the most dangerous endeavors that individual investors and “wannabe” traders can engage in is options trading.

Stock and index options bring with them a degree of leverage and time restrictions that have the capability to blow up an account in pretty short order, something that happens on a pretty regular basis. It is hard enough to pick stocks that go up, but to do so in a fixed time frame is even more difficult. To top it off, if you pick the wrong strike price you can get the direction and timing right and still lose money.

The individual trader is trading against large institutions with pricing, modeling and trading capabilities that are far beyond their own. All too often the retail trader's role in the options market is to provide lunch money for the trading desks and market makers.

Start With A Company's Business Valuation

There is a way that individual investors can use options to earn higher returns and add to the overall return of their current portfolio. This strategy takes advantage of the fact that most option traders think only about the value of the option and not the value of the underlying business.

At the same time, most value-oriented investors are not fans of options, as they view it as a high-risk leveraged trading activity. We can take advantage of these two groups' lack of interest in each others strategy to use options to enhance a value portfolio. Continue reading "2 Tips To Find A Valuable Options Strategy" →

A Look At The U.S. Stock Market Using Weekly Charts

Posted on by The INO.com Team

With the help of some of NFTRH‘s standard weekly charts, we take a snapshot of the US stock market.

The Bank index is unbroken from a weekly perspective.  People will talk about an H&S but it is not activated until the trend channel and the neckline (a well defined support area) are broken.  BKX, along with the Semiconductors has been a notable leader to the entire surprise* phase of the bull market out of Q4, 2012.

bkx

A breakdown of support would break this cycle of the bull market (if this is a secular bull market as many experts think, then the bull would live again after the cycle completes).  It would probably be healthiest to the secular bull case for a breakdown to occur into a relatively small cyclical bear market. Continue reading "A Look At The U.S. Stock Market Using Weekly Charts" →

John Hathaway and Doug Groh: Buy Gold Like It's 1999

Posted on by admin

The Gold Report: In a 4th of July investor letter, you wrote that the precious metals complex, both mining shares and bullion, appear to be in the process of completing a major bottom, and you're more comfortable with the proposition that the downside potential has been fully exhausted. What are the signs that it's really turning this time?

John Hathaway: The gold futures chart is showing that we are in the process of a reverse head-and-shoulders pattern, which is a sign that a bottom has been completed. It means that downward momentum has been exhausted. This bottom will be confirmed when gold trades above $1,400/ounce ($1,400/oz), which is a stretch from where we are. At least we can say fairly credibly that it's shaping up to be a bottom, but we may test it over the summer.

Source: International Strategy Investment Group LLC

TGR: Are statistics on money flows telling you that investors are starting to get interested again? Continue reading "John Hathaway and Doug Groh: Buy Gold Like It's 1999" →

The Stock Market with Elliott Wave Labels from 1693 to Present Day Reveals a Bear Market Formation Since 2000

Posted on by The INO.com Team

By: Elliott Wave International

The following article was adapted from Robert Prechter's June 2014 issue of The Elliott Wave Theorist, one of the longest-running investment letters in the business, continuously published monthly since 1979.

Figure 1 shows the stock market's waves from 1693 to the present. The circled Roman numerals denote waves of Grand Supercycle degree, the largest complete waves for which stock market data exist.

Wave I (circled) ended in 1720 at the peak of the South Sea Bubble in England. Wave II (circled) took the form of a zigzag, labeled (a)-(b)-(c); it ended in 1784. Third waves are usually extended, meaning they are longer than wave one and have clear subdivisions. This is exactly how wave III (circled) developed. It ended in 2000.

Wave III (circled) subdivides into five waves. Wave (I) ended in 1835, wave (II) in 1859, wave (III) in 1929, wave (IV) in 1932 and wave (V) in 2000.

Wave (V) subdivides into five waves, as illustrated in Figure 2. Wave I ended in 1937, wave II in 1942, wave III in 1966, wave IV in 1974 or 1982, and wave V in 2000. Continue reading "The Stock Market with Elliott Wave Labels from 1693 to Present Day Reveals a Bear Market Formation Since 2000" →

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.

Silver Futures

Silver futures in the September contract are settling around 20.40 an ounce finishing down about $.25 for the trading week while still trading below their 20 but above their 100 day moving average hitting a 5 week low and if you are currently bearish silver I would sell at today’s price while placing my stop above the 10 day high which is 21.12 risking around $.50 or $2,500 per contract as the chart structure is outstanding currently. Many of the commodity markets are going lower because of the U.S dollar hitting a 6 month high against the Euro currency as I think that trend is going to continue here in the short term. The volatility in silver is extremely low at the current time and I would assume with all the worldwide problems that volatility will start to increase however prices still look weak in my opinion as the Federal Reserve is cutting back on the quantitative easing which is also a negative influence on precious metals prices as the fundamentals currently are neutral to weak.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Continue reading "Weekly Futures Recap With Mike Seery" →