Category: General

So What's Ahead?

Posted on by The INO.com Team

Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your market update for Friday, the 23rd of September.

I believe it has begun... A total loss of confidence in the markets and zero political leadership in the world.

So what's ahead?

For traders who are not in the loop, it's going to be rough ride! For traders who are informed, it's going to be a bonanza! We plan to make the most of it using both our experience and our market proven Trade Triangles.

It is impossible for any politicians to escape the reality of what we shared with you yesterday. The economic cycles that Kondratieff discovered and later wrote about, are the irrefutable laws of economic expansion (good times) and economic contraction (hard times) of a capitalistic economy. I don't have to remind you which part of the Kondratieff cycle we are in now.

Yesterday, markets around the world voted and the vote reflected a huge sign of no confidence for the global equity markets.

Are we all connected? The answer is yes, now more than ever.

Billy Joel sang in his 1982 hit Goodnight Saigon "… and we will all go down together". It looks to me like that's what is happening now in all the markets.

Key level to watch in the SP500 index today 1123.53. A close below that level should be a signal for aggressive traders to short this market for the weekend.

Now let's go to the 6 major markets we track and update every trading day and see how we can create and maintain your wealth in 2011. Continue reading "So What's Ahead?" →

Post-downgrade Volatility: 4 Tips for Trading

Posted on by lindsay

Today's guest blog post comes from our friends at Lightspeed Trading. This original post debuted on their Active Trading Blog on September 20th, 2011. In this post, Lightspeed shares 4 tips for trading in a time of great volatility and uncertainty. Enjoy!

 

 

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There is no question that this is a superior environment for active trading. The “fear index” VIX recently hitting 50 combined with ultra wide swings provides traders with numerous opportunities for profit. These moves are triggered by the economic confusion that seems to be affecting the entire global system. The Eurozone debt crisis, Standard&Poors’ US downgrade, and whether or not Ben Bernanke will institute QE 3 all add to the inherent volatile nature of the stock market. However, these same moves that lead to outsized profits can also result in heavy losses for traders not skilled and prepared for the volatility. This article will provide 4 critical tips for dealing with market volatility.

Tip 1. Stay Nimble

Not getting married to any one position is a key for success in volatile markets. In fact, it’s a key for success in any market condition. Trading skill combined with a robust trading platform can enable savvy traders to quickly take profits or cut losses within ultra volatile environments.

Tip 2. Fade the extremes

Buying after a very sharp decline and selling after a sharp rise can be a tactic for profiting in heavy volatility. Just take a look at a recent daily chart of the DJIA or S&P 500 to see an example. The snap back rallies and the subsequent plunges are custom made for fading.

Tip 3. Use options

Options can be a powerful tool to use in volatile markets. A strategy known as a straddle can be used to profit from sharp moves, even if you don’t know the direction. A classic example of an excellent time to use a straddle strategy was prior to the pending S&P downgrade. No one knew for certain what way the market would move after the rumor became reality, creating the perfect straddle environment. This strategy provides profits if the underlying instrument moves substantially in either direction. Straddles are the simultaneous buying of a Put and a Call at the same strike price and expiration date. This position has the trader covered in the case of the economic surprise, bullish or bearish. Just keep in mind that the subsequent move must be aggressive for the straddle to profit. You are betting on the magnitude, not direction, of the move.

Tip 4. Ride the trend

If you are able to recognize a solid move in one direction, jumping on board can lead to profits. This so called trend trading can work nicely for short term traders, as many moves even in volatile markets can last for several days or longer prior to reversing.

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***The views and opinions expressed in this post are that of the featured Guest Blogger. This post does not necessarily reflect the INO.com’s own views. All trading involves a level of risk. Individuals should fully understand risks before entering the market. None of the information contained in this post should misconstrued as advice or any sort of solicitation to buy, sell or otherwise invest in any fund, company or security. ***

This Russian Economist Died By Firing Squad, But He Had the Answer the Fed and Washington Are Looking For.

Posted on by The INO.com Team

Hello traders everywhere!  Adam Hewison here, co-founder of MarketClub with your mid-day market update for Thursday, the 22nd of September.

This Russian economist died by firing squad, but he had the answer the Fed and Washington are looking for.

The problem we have is the Fed and the Government are fighting to shore up the very powerful cycle that made America great:  Capitalism.

So what's the answer to our current economic problem?

Nikolai Kondratieff was a Russian economist who came up with this economic theory:  Every 40 or 50 years in a capitalistic society, the markets peak, then turn down and go into a recession/depression. Because of these findings and other work he did on cycles, Nicolai Kondratieff was summarily executed in 1938 by a firing squad.  It would appear that these cycles guaranteed the rebirth of capitalism, and that did not sit too well with the Communist Party, who at the time wanted to rule the world.

Doing some rough math, you could look back and say in the 1930s we had a depression, in the early 1970s we had a major recession, and here in 2011 we are facing a serious recession/depression.  This is not something new that we're going through right now.  Some time ago we posted a blog report on 100 years of capitalism and how the markets expand and contract.  We, as a country, have been here before.

The question is, how do you make money during times like these?  You must be flexible!  And it helps to have technology like our Trade Triangles available to help you.  Today illustrated a good example when we had a signal to exit out of gold for intermediate-term traders.  You can also see we've been short and out of the equity markets since August.   Don't trade by the seat of your pants in today's markets, you are going to lose!  It is far more expensive to go it alone and not have our service.  This has been proven time and time again.

As we came in this morning, Europe was under tremendous downside pressure and some would say that, "the hens have come home to roost."  But the big surprise for many traders was the huge drop in commodities and gold.  I think many investors moved into gold thinking it was a safe haven.  In the long-term they could possibly be right, but these aren't buy-and-hold markets anymore.  The world has changed and you need to adapt to this new investment world, or you will not survive.  In the current markets you need to be aware of the direction of the trend and where to place you money.  Our mission here at MarketClub is to help you survive and thrive in these uncertain economic times.

Now, let's go to the 6 major markets we track and update every trading day and see how we can create and maintain your wealth in 2011. Continue reading "This Russian Economist Died By Firing Squad, But He Had the Answer the Fed and Washington Are Looking For." →

Adam's Thoughts on Operation Twist, Hewlett-Packard and Netflix

Posted on by The INO.com Team

Did you miss MarketClub TV last night? If you did you missed a great intro/rant by Adam. He covered the announcement by the Fed, news from Hewlett-Packard about their CEO, Netflix's announcement and of course the Trade Triangles for the day.

We've cut out the intro for you to watch here.

Watch the full episode here.

We would love to hear your thoughts on this video. Please leave your thoughts in the comments section.

Every Success,

The MarketClub Team.

All Eyes Are On the Fed Today

Posted on by The INO.com Team

Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your mid-day market update for Wednesday, the 21st of September.

All eyes are on the Fed – Will they twist again like last summer?

It would seem as though the world and the markets are waiting to see what the Fed is going to do today at 2:15 PM. They are supposed to make an announcement. This is always the technician's dilemma... Do I leave my positions intact with stops? Or do I take them off before this major announcement?

Let me share with you a quick story about one of the most successful traders I've ever known. Here was a gentleman who traded all the markets, strictly on the charts. He didn't listen to the news, didn't care about the news, and certainly didn't care about what Ben Bernanke was about to say. He simply went with the big trends. Based on that thesis, one should remain short the equity markets and remain long in the gold market with the appropriate money management stops.

As traders, we are bombarded with news. Some of it is useful, but a lot of it is just fluff to fill up airspace time. One piece that caught my eye this morning, which I haven't seen reported in the main media, concerns the venerable Lloyds of London insurance company. This company was founded in 1688 in a London coffeehouse and has gone through wars, boom and bust cycles, every money mania known to man and has always managed to survive. The article claimed that Lloyds of London is taking their cash out of the European banks this morning:

http://www.businessweek.com/news/2011-09-21/lloyd-s-of-london-pulls-deposits-from-banks-on-debt-crisis.html

Quite frankly this is shocking, but not surprising given Lloyds' survival instincts. Lloyds of London is one of the most conservative companies, run by some of the smartest people on the planet. Perhaps it's an early warning sign about what could potentially happen in Europe.

It is something to think about.

Now let's go to the 6 major markets we track and update every trading day and see how we can create and maintain your wealth in 2011. Continue reading "All Eyes Are On the Fed Today" →