One Chart Explains Why Government Debt Is Dragging on the Economy

Posted on by The INO.com Team

By Dan Steinhart, Casey Research

The US has too much debt. This is no longer a controversial statement. Some may believe other problems are more urgent, or that we need to grow our way out rather than slash spending. But even the most spendthrift pundits acknowledge that the debt-to-GDP ratio of the US must decrease if we are to have a stable, prosperous economy.

The private sector has reacted to this over-indebted reality as you would expect: by deleveraging. Since 2008, households and businesses have extinguished of 67% of their debt when measured against GDP. Some paid debt down purposefully, and others defaulted. For our purposes, it doesn't matter how the debt went away. Only that it did.

Meanwhile, the government has done the exact opposite. It has upped its own borrowing by 52% of GDP since 2008. Continue reading "One Chart Explains Why Government Debt Is Dragging on the Economy" →

Weak earnings reports weigh on stocks

Posted on by The INO.com Team

The stock market struggled to hang on to meager gains after investors found little to like in weak corporate earnings reports and news of only tepid growth in the U.S. economy in the third quarter.

The Dow Jones industrial average was up eight points at 13,111 shortly before the close of trading. The Standard & Poor's 500 index fell a fraction of a point to 1,413 and the Nasdaq composite rose seven points to 2,993.

Stocks rose in the morning before a mild midday sell-off, then recovered somewhat in the afternoon.

The morning gains came after the Commerce Department estimated that the U.S. economy expanded at a 2 percent annual rate from July through September. That was better than the previous quarter, and better than analysts expected, but not strong enough to bring down the unemployment rate. Continue reading "Weak earnings reports weigh on stocks" →

Daily Video Update: 12,25,100 and 750, all are meaningful numbers 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 Thursday, the 25th of October.

Apple disappoints and Amazon posts a loss.

As we stated in yesterday's video we were on the sidelines on both Apple and Amazon before their earning announcements. This sideline position was based on our weekly intermediate trend Trade Triangle. Once again this conservative strategy proved to be a winning approach for both of these stocks which have performed so well for our members.

So what do 12, 25, 100 and 750 have in common? The one thing they have in common is, they are all important numbers now and the next several days. Here's why they are important.

Let's begin with 12… Continue reading "Daily Video Update: 12,25,100 and 750, all are meaningful numbers today" →

Stocks Seeing Modest Strength On Upbeat GDP Data

Posted on by The INO.com Team

(RTTNews) - With traders reacting positively to upbeat U.S. economic data, stocks have moved modestly higher in early trading on Friday. The major averages have climbed into positive territory, adding to the slim gains posted in the previous session.

The major averages have pulled back off their highs for the young session but currently remain positive. The Dow is up 11.25 points or 0.1 percent at 13,114.93, the Nasdaq is up 10.72 points or 0.4 percent at 2,996.84 and the S&P 500 is up 1.48 points or 0.1 percent at 1,414.45.

The early strength on Wall Street comes on the heels of the release of a report from the Commerce Department showing stronger than expected U.S. GDP growth in the third quarter. Continue reading "Stocks Seeing Modest Strength On Upbeat GDP Data" →

Third Waves are "Wonders to Behold"

Posted on by The INO.com Team

The Elliott Wave Principle states that in financial markets, prices unfold in 5 wave patterns:

In wave 1, the trend has begun. Wave 2 makes a sucker outta you. Wave 3 is a powerful sight to see. Wave 4 is a corrective chore. And wave 5 is time to look alive -- once more.

Elliott Wave Principle -- Key to Market Behavior (the ultimate resource for all things Elliott) provides this definition for wave 3:

"Third waves are wonders to behold. They are strong and broad, and the trend at this point is unmistakable. Increasingly favorable fundamentals enter the picture as confidence returns...

AND: "It follows, of course, that the third wave of a third wave and so on will be the most volatile point of strength in any wave sequence. Such points invariably produce breakouts... and runaway price movement."

This chart shows the personalities of each of the five waves. As you can see, wave three usually begins just when investors are convinced the bear market is back. (You can flip this chart for a five-wave move to the downside -- in which case, wave three begins just as investors think the bull market is back.) Continue reading "Third Waves are "Wonders to Behold"" →