Category: General

Adam Hewison on CNBC
Adam Hewison, president of INO.com, will discuss the market outlook on CNBC on Monday, January 28. The segment begins at approximately 11:00 a.m. Check your local listings for details.

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The results of our Traders Blog survey are in and 62 percent of our respondents got it exactly right when they said that they are bearish on the economy.

The other 38 percent of our respondents said that they were bullish or neutral on the economy. I hope they were able to avoid the recent collapse in the markets, otherwise it has been an expensive month for them.

The one great thing about markets, is that there are two sides to every trade. You can trade from the long side, or trade of the short side. Both sides offer you a way to make money. Why trade only half the time when you can easily trade both ways and make money.

The only thing you can count on in the markets is that they will fluctuate. Your job is to determine if the fluctuations are headed higher or lower.

Members of MarketClub can easily determine market fluctuations by using our "Trade Triangle" technology. Most member using this technology are either short stocks or out of the market. It's safe to say that they have done very well in this downturn.

Here's one of the realities of the marketplace. You cannot and should not follow the crowd. Unfortunately every talking head guru seems to talk about the same things at the same time as the other talking head gurus. Last summer it was global growth, remember that was going to send stocks into the stratosphere, now it's doom and gloom. They the gurus are always the most bullish at the top, and the most bearish at the bottom. The fact is, no one knows exactly where the market is headed, except the market itself.

Here's what I mean ...

Let's have a little reality check on some of the (former) darlings of the tech world.

Apple, After trading over the $200 a share, Apple's magic hit the skids as it fell from grace to trade below the $130 level in just 15 days. MarketClub members exited Apple (symbol appl) at 178.60 on January 7th. Now where would you rather be with Apple, on the sidelines, our hanging on and worrying if Apple is ever going to stop going down?

Now let's take a look at Google (symbol goog). Google was the mega star of the tech world trading close to the $750 level on November 7th. So what happened just few months later that had Google on the ropes at what seemed to be a bargain price of $519? What changed? What happened in Google to cause such a fall? What happened was that market and traders perception changed and Google was not going to take over the world, at least not just yet. MarketClub members exited Google at $652.50 on January 7th. There must be a lot of unhappy folks in the Googleplex tonight who are feeling a whole lot poorer than they did two months ago.

You cannot hold onto stocks like Apple or Google forever, these are trading stocks. We are in a new world paradigm, a new world of trading and investing that dictates that you must remain fluid at all times. The message here is you have got to time your trade entry points and more importantly you have to time your exit points on when to get out! These two fundamental position plays along with money management are the key to successful trading.

If you are not already a MarketClub member, and you are reading this blog, I strongly recommend that you check out MarketClub. You will find that MarketClub can alert you and offer unbiased opinions on practically any market that trades. It doesn't matter if you trade in stocks, futures, precious metals or foreign exchange, MarketClub has you covered.

Billions upon billions of dollars have been needlessly lost in this market in the past three months, much of it can be directly attributed to Chairman Benanke and the lack of action by the FED. But a lot has to be attributed to the individual investor who has yet to learn when to exit a market.

We have been saying on this blog for quite some time that Chairman Ben Bernanke is not the right man to lead the economy or the Federal Reserve. What we need is someone much stronger and someone who is in touch with reality.

The person who comes to mind is Paul Volker who was chairman of the FED in the early '80s. The markets knew where they stood with Volker and he was no namby pamby like Bernanke. He made decisions and the markets respected him and knew what to expect from him. They have no idea what to expect with Bernanke and that's why the markets are volatile.

Todays FED is clueless.

What strikes us as stunning is the fact that there was no coordinated cut in interest rates with any of the other central banks. It seems that the FED was just winging it on Monday night when it made the decision to cut the federal funds rate by .75 basis points.

This lack of a coordinated effort among the central banks tells me that the FED and Bernanke are in an ivory tower, isolated from the real world and the markets.

For future reference we expect to see the federal funds rate to evaporate down to the 2-2.5 level in the next twelve months.

Today's bounce in the stock market from the previous low was encouraging, but it is just a bounce. All our indicators remain negative on the stock market.

Remember one day does not make a new trend.

Once in the game of trading, you must have a game plan if you are going to be successful. If you are just trading on emotion, eventually you will lose, it's that simple.

At INO.com we supply traders around the world with tools they can use in the real market to become more successful. Our latest educational tool is INO TV, and our other global trading tool that used around the world and one we highly recommend is MarketClub.

Both of these products are affordable and will help you save and make money in the future.

I have included several videos in this blog that depending on which market you trade you can watch directly on your computer. No registration required.

The MarketClub approach performs extremely well in any market environment. Don't allow the FED to kill your retirement nest egg or trading capital. Listen to what the market action is telling you, that's the only way to make decisions based on facts and not fantasy promises.

This is Adam Hewison wishing you every success in the marketplace and in the future.

Adam Hewison
President, INO.com.

Our friends over at Dow Jones Newswires were gracious enough to include us in a recent article they wrote on copper. I thought you might find it interesting.

Cheers,

Adam

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FOCUS:

Area Around $3.40 Next Key On Charts For Comex Copper

By Allen Sykora
Of DOW JONES NEWSWIRES

Technicians say the area around $3.40 and above is the next
key upside chart point for March copper futures on the Comex
division of the New York Mercantile Exchange.

Already, the futures have retraced roughly 50% of the
sell-off from the Oct. 3 contract high of $3.75 a pound to
the Dec. 17 low of $2.8530. They hit a two-month high of
$3.3785 on Wednesday, before consolidating lower.

The area around $3.40 represents resistance based on a
number of technical indicators, chartists said. At the
moment, the futures appear to be range-bound and moving
sideways, said Larry Young, senior trader with Infinity
Futures.

"We really need to break out. Obviously, $3.40 right now is
major resistance," he said. "We need to build momentum to
get through that so we can start chipping away at the highs
again."

Many pre-placed buy orders lie around the $3.40 area, Young
said. Some traders who went short during the late-2007
decline placed stops here, he said. "Others look at that as
a point to get long again," he said.

The 50% Fibonacci retracement of the October-December
decline lies slightly above $3.30, a level the market has
been on both sides of in each of the last four trading
sessions. The 61.8% Fib retracement is just above $3.40.

"A lot of traders focus on those," Young said.

The high this week of $3.3785 potentially could be the
market's test of this 61.8% Fib level, particularly amid
concerns about possible economic slowing, said Darin Newsom,
senior analyst with DTN.

Otherwise, Newsome explained, he watches what is termed a
"five-point top" based on prior major higher highs and major
lower lows. Based on this, he said, the recent rally may
continue but run into speculative selling somewhere between
the $3.41 to $3.46 area. He said the fact that futures are
in contango rather than backwardation, as they were for
months, indicates less tightness than at one time when they
were in backwardation. The latter is where the nearby
futures are more expensive than deferred contracts and is
seen as a sign of supply tightness.

"If we get back into the $3.41 to $3.46 area, it could be a
selling opportunity," Newsom said. "But if we get through
that, it might start to trigger some renewed buying
interest."

Adam Hewison, president and chief strategist with INO.com,
expectsthe March futures to rally possibly to the $3.50
area, a target zone based on recently making a
head-and-shoulders bottom.

"Certainly (a rally is possible) to the $3.40 level, which
represents the 62% Fibonacci retracement," he said.
"Potentially, somewhere between $3.40 and $3.50 would be a
reasonably good target zone.

"We closed last week (around) $3.15. We're up for the week.
We're up for the month. I think the market looks very, very
good."

He listed a longer-term target of $4 to $4.16 a pound.

The area around $3.40 is also around the market's strongest
level of the last two months or so - $3.42 on Nov. 7.

Copper has recouped much of the October-December weakness
even though concerns have surfaced lately about the health
of the U.S. economy. Nevertheless, analysts said, this could
be offset by strong demand from China, now the world's No. 1
consumer of the red metal. Demand is also growing in the
Middle East region, Young said.

"Any slowdown in the U.S. is going to hurt copper, but the
U.S. was supplanted by China in terms of gross usage of
copper," Young said.

"We're not in a domestic market any more," Hewison said.
"We're in more of a global market. It may be bad here but
still great overseas. That's what's going to drive the
market.

Hewison said "it definitely looks to me like the market has
put in a bottom."

Technicians List Key Downside Chart Points

Traders and analysts listed several downside levels that
will be important for March copper to hold on any pullback,
in order to avoid acceleration on downward moves.

"If we get below $3.1050, we're going to push this market
lower. That's a key level on the downside," Young said. The
market stopped around here twice early in the month - right
at $3.1050 on Jan. 4 and at $3.1060 the next trading day,
Jan. 7.

Young said he anticipates a pullback in copper prices in the
short term but remains bullish over the longer term, based
on the technical picture.

"It looks like right now the Dec. 17 (low of $2.8530) is
potentially going to hold as a bottom," he said. "If we can
stay above these levels, we could try to move this market
higher."

Technically, Hewison explained that a buy signal occurred in
copper futures late last month, based on the pattern on a
chart for open-outcry-only trading in the March futures.

"We believe the market made a head-and-shoulders bottom,"
he said. "The first shoulder was made on 11/21 at $2.92. The
head was created on Dec. 18 at $2.87. The right shoulder was
(around) $3.02 on Dec. 31. And neckline for the
head-and-shoulders was $3.20."

He listed key support around $3.20 in the near term and $3
in the long term. "If we were to take out the right shoulder
around $3.02, I would consider the pattern to be broken,"
Hewison said.

Newsom said the market's recent rally occurred after a
pullback to support to prior retracement levels around $2.88
to $2.95 last month. The market dipped briefly a few cents
below this last month, but did not close below it. The next
major support is around these lows, he said.

Dow Jones Newswires is a trademark of Dow Jones & Company, Inc.