Sunday, November 29, 2009

Dubai, Real Estate gone Awry!!




It is so important to realize when the market hands you clues to use when trying to dictate direction. On the night before Thanksgiving, news hit the wires that Dubai is requesting an extension on repayment of it's loan. Then on the day of thanksgiving the LSE was shut down due to price depreciation, and little was reported of this. When the US market opened up for trading on Friday, it was down triple digits and picked an unusual day to notify traders that more problems are facing the financial sector. The problem that is shaking the global markets is that Duabi is heavily supported by foreign investors such as China, Japan, and many European countries. The problem is the US relies on China to keep buying our T-bills in efforts to bail us out of our economic woes and with the banks still fragile may now have to pony up for a rescue plan for this desert Oasis which is now starting to look like a mirage. This could derail the current uptrend that we are facing as the dollar may become the safe haven for foreign investors, lowering the price of oil and spreading fears of panic again if the Dubai economy turns to sand. There is a Dark shadow with commercial real estate looming and if this plays out could be the tip off to the second down trend that many have been cautious of since the markets recent uptrend. Monday 11/30/2009 will be the true test of major selling or will the market shake off the bad news and move higher? Stay tuned as this story develops. Looking around the charts have notice that we are seeing quite a few bearish patterns setting up and that spells trouble. An example of this is a Head and Shoulders Top on the stock symbol TEX.
As stated in our last post the market is showing sign of cracking so now longs pay close attention and pick a spot that you are happy with profits for winning at the game of investing is letting the market lead the dance and taking profits on a regular basis. To get more charts like these try our free 2 week trail and learn the clues the market provides at http://www.themoneychart.com/. Remember it is not what you make on your stocks but what you keep. As always, take all ye can and give nothing back.

Friday, November 20, 2009

OIH may walk the Plank


Looking over some charts this evening and noticing that one particular sector looks as if it is about to hit rough waters. Guess which one? Is the suspense getting to you? The Sector is OIL and it's service providers. When you take a look at OIH and stocks that comprise this ETF you will notice that many of these charts are displaying a topping effect, such as an head and shoulders top or another topping formation known as the double top. They say one can learn from the past and when you take a look at the chart of the OIH, you can see that we have visited this once before and the pattern failed to work it way to completion, or as I like to call it a Head fake. (Sorry for the pun.) Either way the difference between failure and success is the sector as a whole is setting up versus a few when this pattern last occurred. We will see if this pattern will be successful in meeting it price objective of $98.00 from it's current price of $117.10.. So get out the swords and tell this stock that it is time for it to walk the plank, for it has an appointment with Davy Jones' Locker. Take all ye can and give nothing back.

Sunday, August 2, 2009

Overbought, Overdone, Outragious, but truly Amazing.


On the last post We covered some reasons why the market should fail. So far it has not. Bears are licking their teeth jumping at every turn and then having to cover the next day. I think the soup Nazi said it best " NO Shorts for You, Next!" So now we have the market making new highs on light volume trading, typical summer action, and the market is showing truly how amazing it is. The thing that makes the market such a work of art is all of the styles of trading are rewarded at some point. Think about it for a moment and bask in the glow of it's greatness. Shorts were in vogue for all of the year for 2008, longs brave enough to take the plunge have been rewarded for their conviction since March of 2009. Swing traders as of late are in a euphoric state as their picks seem to do no wrong and slight pullbacks are easily manageable. Even the Day Trader is seeing constant action as the market seems to be a little more mechanical in it's nature. The market is sometimes made out to be this mystic monster that is ruthless cold and only good at taking investors money while quickly escorting them out the door with a smile saying "comeback again when you have more money to play." This to me is why one must always study the past of the markets to understand it's purpose. The market is a well oiled machine that makes fortunes and plunders accounts on a daily basis. So as we are now starting to get comfortable with the market again, keep your eye on the radar for a pullback is due but not in the magnitude we just felt 7 months ago. The line in the pirates of the Caribbean should become the battle cry for all investors. "Take What ye can! Give nothin' back!"

Tuesday, June 16, 2009

What Goes Up Must Come Down - Blood Sweat & Tears


The market as of late has been moving to the upside punishing those who did not believe that it could bounce and could not "Spare a Square."(Love Seinfeld.) Now we are faced with the fact of do we move higher or did we just witness one heck of a Bull Run in a Major Bear market. One thing is to reduce the noise factor as every talking head chimes in on how Dow 14,000 is just a few weeks away and the recovery is here. Amazingly those same talking heads declared the recession about 6 months late and seem to want to make up for it by letting you know that it is time to buy. I tend to take somewhat of a contrarian view on the whole matter. When the media declares that it is time to buy, you are late to the party and all the Hunch Punch is gone. At the same time when the market was in a death spiral the media then was telling us to stay on the sideline and do not risk anymore loss. Note to self do not listen to the media. Now the market has made a fantastic move to the upside, reevaluation is at hand and hard stops on those profitable trades is a must. If you think of trading as mechanical and less emotional,(tough to learn) you will benefit greatly from the market. Another clue as when to pull the plug, is when leaders of the market struggle to make new highs (BIDU, GOOG, CME, ISRG, AAPL,RIMM)then the rest of the market starts to rollover. I think it is best to say that now that we have had a move up, it must come down, Spinning Wheel got to go round, Talking about stock doubles is a crying sin, Ride a rigged option, Let the spinning wheel Spin......