The Role Of Stock Market Analysis Before Any Investment

The realm of stock market is constantly thriving under the process of modifications and alterations. Considering the fluctuations it brings every day, making profit from it requires intensive planning. It is in the context of this fact that a step by step process is defined as the ideal approach. Ranging from your amount to be invested to the expected return, all the facets need an advanced calculation. Stock trading perceived as the effective avenue of financial gains, in order to reap benefits from investments made here, market analysis is the call of the situation.

Stock market analysis is the foremost thing which is mandatory prior to any financial investment. To be defined in layman terms, stock market analysis refers to the entire procedure of monitoring and analysing the stocks and thereby calculating the future trends. With the stock prices having the tendency to rise and fall, the whole scenario becomes volatile. However, since a defined pattern is followed by the stocks an insight can be procured subsequent to a thorough analysis. Stock market analysis is a process abided by most of the investors. Providing essential information to them, it is a proven way to extract the best out of the current status.

The kind of analysis executed by the investors varies. While some investors take the help of fundamental analysis, other investors go for the technical analysis. The latter one is primarily used for the evaluation and estimation of the returns from stocks. Technical analysis facilitates the investor in getting an insight about the expected returns from the stocks. The importance of stock markets analysis holds more value for the beginners who are new to the field of stock trading. Regards to this, there are a set of guiding principle which has been enunciated by many especially for them to act as a complete guide to the financial market. These guidelines cater to the probable questions faced by every novice as to the correct method for stock market analysis.

The whole process of buying and selling of stocks necessitates the implementation of analysis. As per the market professionals, carrying out this procedure on a timely basis definitely helps in garnering the best of profits within a short span of time. For the convenience of the traders, there are multiple stock market analysis tools which can be used. Support and resistance is one of the effective ways for financial market analysis. With the common assumption of the rise and fall of stocks post their touch to support and resistance, this method is applied to understand their up and down levels accordingly.

The system of technical analysis is exhaustively used which involves the use of quantitative charts for determining the price trends. In the form of bars, these charts illustrate the significant data about the stocks in a time period format. Candlestick chart is another method which makes the use of colour to showcase the fall or rise noticed in the closing price of the stock. In addition to this, the cup and handle pattern is well known throughout for showcasing the variation of the stock prices and thus the right time to invest in it. Thus in contemplation of the importance held by market analysis tools and the valuable information provided by them, it becomes imperative for the investors to follow a calculative approach for harvesting the best of benefits from stock investments.

Techniques for Stock Market Analysis

Two popular types of stock analysis include technical analysis and fundamental analysis. Technical analysis is a financial markets technique that claims the ability to forecast the future direction of security prices through the study of past market data, primarily price and volume. Technical analysis in its purest form considers only the actual price and volume behavior of the market or instrument, on the assumption that price and volume are the two most relevant factors in determining the future direction and behavior of a particular stock or market.

Technical analysis is embraced by some and hated by others. It is widely used among traders looking for stock trades and deciding how to trade stocks. Technical analysts consider stock trends based on their chart and stock market close each day while completing stock technical analysis.

Technical analysts say that a market's price reflects all relevant information, so their analysis looks more at "internals" than at "externals" such as news events. Price action also tends to repeat itself because investors collectively tend toward patterned behavior – hence technicians' focus on identifiable trends and conditions.

When completing stock market analysis it’s important to consider stock market trends and look at the macro environment of the economy. One should study the stock indices and how they have performed lately and even years in the past by considering the stock chart of the market. Stock earnings can affect the stock market as a whole or just a few industries.

An industry that is hot could have many hot stocks within it and momentum stocks that could be very good stock ideas. Some investors decide to daytrade individual stocks that are hot and may trade up during one stock market session. It is important to do technical analysis when day trading. Investing should be considered risky and each investor needs to consider their risk tolerance.

Individual stocks can be undervalued stocks or bargain stocks that are cheap stocks. It is important to look at a stocks PE and other ratios that act as tools for investors. When considering the value of a stock, an investor needs to look at the company’s market capitalization or market cap to first have a point of comparison while researching stocks. Stock trends are also important to pay attention to as well as general stock market news for stock market analysis and stock news for individual stocks.

Stocks trade on several exchanges including the NASDAQ, AMEX, NYSE, OTCBB and Pink Sheets. This is where buying stocks occurs by online brokers for their clients. Investors can look for value stock or any other kind of stock they want. It is important to find as much stock market information as possible to experience new information and facts.

There are many stock tips and penny picks out there that investors can start to build a stock list or screening NASDAQ and AMEX stocks with a stock screen for new stock ideas. There are lots of investment opportunities out there in the stock market.

Introdubtion to Stock Market Analysis

When it comes to trading stocks, it's important to understand how to understand the principles of stock market analysis so you can decide which stocks to buy or sell for your portfolio, such as stocks belonging to the S&P 500, which contains some of the most popular stocks in the US from large businesses that trade on both of the US stock market exchanges. Without that knowledge, you could lose thousands of dollars and be totally lost in the system.

What is stock market analysis?

Stock market analysis is the process of investigating and studying data on existing stocks and trying to predict how they will do in the market. This is used by most traders due to the fact that stock prices can change from moment to moment, but they normally have a pattern of either going up or down that can be analyzed and followed. Some investors use what is called a technical analysis. This is mostly used to figure out the possible return the stock will provide its owners. When traders get tips on various stocks it is usually after this sort of analysis.

What can influence stock returns or losses?

Multiple factors go into stock market analysis to see what sort of thing causes the prices to go up or down. Some of these factors include the business' background, the economy, historic trends, or even natural disasters like hurricanes or earthquakes. You can't use a system of stock market analysis over the long term, however, because it doesn't include any information on a business' future potential. But you can use it to keep track of the ups and downs of a particular stock.

How do traders use stock market analysis?

Traders have multiple tools to use when it comes to market analysis. They can use well-developed patterns, or use what is called support and resistance. Support is when they track the level from which lower stock prices are predicted to go up from and resistance is the height the stock is predicted to get to before it may go down in price again. The theory is that most stocks can be predicted to rise or fall after they get to a support or resistance amount.

Other Methods of stock market analysis

Some of the other methods of stock market analysis include:

Charts and Patterns

When it comes to tracking stocks one of the methods is through charts and patterns. A system of bar charts is normally used that represent periods of time (like daily, weekly, etc). The top of this chart for stock market analysis would list the high price while the smaller bar chart to the right lists the opening and the other one lists the closing prices.

Another chart sometimes used is called a candlestick chart. It uses a slightly different system of markings to show the highs and lows and prices of the stock it is following. It also uses a color system, with red or black if the stock's closing cost was lower than the one prior to this one or white and green if it was more.

A particular pattern that is often seen in financial market analysis is known as the Cup and Handle. This is when a stock starts off with a high price and then dips in cost and eventually returns to a higher price. When that stock levels out in costs, it is called the handle of the stock, and this can be a good place to buy so the trader makes good profits when it goes back up, which is the cup part of the pattern.

Head and Shoulders is yet another stock pattern. It means that the stock first comes to a peak (a shoulder), then gets lower and then forms another even higher peak (the head), and then goes up again, (another shoulder).

Moving Average – A very popular stock market analysis tool, this one reveals the stock's median cost within a certain timeframe. It is plotted on a chart so that traders can see what the stock's pattern is.

Relative Strength Index – This stock market analysis tool looks at a comparison of the amount of days a stock ends on a positive note and the amount of days it ends on a negative note. It is used over a specified amount of time, normally nine to 15 days. In order to use it, the traders divide the median amount of days the stock goes up by the median amount of days it goes down. The result is added to one and employed to divide 100. Then you subtract that result from 100 to get the stock's relative strength index. Depending on that amount, a trader can tell if a stock is strong or weak.

Money Flow Index – This process uses the amount of shares that were traded plus the cost of the stock. If this number is high, you should sell your stock, but if it is below 30 you should buy more.

Bollinger Bands – This type of stock market analysis is recorded as a plotted group of three lines. The results are based on how volatile the stock's prices are moving.

All in all, you must use some sort of stock market analysis if you want to be successful in trading on the stock market.

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Investors Cheered on Ben Speech

The Dow gained 160 points today as Fed chairman promises to keep expansionary monetary policy.

Fundamentals
Uncle Ben's promise to keep rates low in order to continue encouraging job growth before market open today pleased investors and drove index futures up high leading to a positive opening. Investors have been concerned about the Fed increasing rates after such strong job growth as reflected in the Jobs Reports so far and today's commitment to a low rate truly encouraged the market to come back in a big way. In fact, the SP500 made a new 4 year high today. Strangely though, unlike truly strong market days, bond yields remained relatively stagnant suggesting that investors have yet to reallocate back to equities strongly. Options traders also continued to keep total equities put call ratio above par in favor of put options trading. Would these investors and traders join in the fray over the next few days?

Technicals
The Dow completed its retest of the 13,000 points + 30MA today as it rebounded off the 30MA line intraday last Friday and resumed the bull trend strongly today, coinciding with the positive commitment from the Fed. It is amazing to see how fundamentals always coincide so nicely with technical setups which is what made me focus on technicals more than fundamentals. So far, the Dow has done everything I said it would to the dot, very classic bull trend behavior and setups. As the quarter ends, investors would once again be concerned about "Selling in May and Run Away" and with the market so overdue another intermediate correction, this could well be the final up leg before the volatility of an intermediate correction hits.

For now, the Dow turns all out bull trend.

Dow Retreats Despite Better Economic Data

The Dow retreats 78 points despite better than expected economic data.

Fundamentals
Both Jobless Claims and Leading Indicators turned in better than expected today, continuing the jobs recovery scenario laid down by this month's better than expected Jobs Report. However, market begun trading in the red and continued in the red throughout the session on lousy showing in the global markets prior to US market opening. Even though it was a negative day in the market, we did not see the kind of all out exodus back into bonds by investors as bond yields only dropped a tad across the board. This is perhaps due to the continued better economic numbers which should lead to better showing in the stock market really soon and investors really don't want to miss out on that. Options traders, however, are more pessimistic as they once again took total equities put call ratio above par in favor of put options trading.

Technicals
As expected and as mentioned in my email to paid subscribers yesterday, the Dow continued to test the 13,000 points for support. The positive thing at the 13,000 points level now is the fact that the 30MA is also around the area and the Dow is now once again sitting on top of its 30MA, which is a strong short term bullish support, and would have a good chance of rebounding from this area into new highs especially with the Dow now in short term oversold condition after three straight down days.

For now, the Dow remains in short term neutral trend, intermediate bull trend and primary bull trend.

Dow Continues Sideways...

The Dow continued to move sideways today, gaining 6 points in a quiet trading day.

Fundamentals
The US market continues to trade in lackluster fashion today in a day without any market moving news. The overall market also received very little boost from Apple's decision to open up its treasuries and pay out dividends following Steve's death. Investors did continue to move back into equities as bond yields rose across the board. Looking at the stock market calendar this week, it seems like the heavy day would be Thursday when we will not only get the weekly jobless claims but also Leading Indicators (see Stock Market Calendar).

Technicals
No surprise today as the Dow continues to move sideways as I have predicted last week. Indeed, three to five sideways or slightly negative days following huge single day rallies are commonplace as short term traders take profit off the table while investors continue to buy in. With the Dow still in short term overbought condition, we could still see the Dow come down and retest the 13,000 level for support before it has the energy to move upwards steadily for new highs.

For now, the Dow remains in all out bull trend.

Dow Breaks Out!!

The Dow made the biggest gain of 2012 today, rising 217 points on positive Fed statement.

Fundamentals
2012 continues its bullish surprises today as investors jumped back into equities big time on the positive economic outlook in today's Fed announcement. Bond yields jumped upwards across the board as investors rushed out of bonds and into stocks. Options traders also took total equities put call ratio down below 0.9 for the first time in a while. Today also marks the biggest single day gain of 2012 and is especially significant on the technical side of the story. 2012 has been about the US economic recovery so far and to support today's Fed statement, all sales indicators also turned in positive as consumerism picks up in the States. http://www.blogger.com/img/blank.gif

Technicals
As I have expected two days ago in my comment that "the Dow now has a real chance at breaking the 13,000 points level", the Dow made a decisive breakout today, climbing back up to the early 2008 levels! Today's breakout would form the support needed for the Dow to continue this incredible bull trend even though it has also taken the Dow into short term overbought condition and it would not be surprising to see a few sideways or slightly negative days from tomorrow onwards as investors and traders take short term profit off the table. Also, a retest of the 13,000 points level would also be possible in order for the market to solidify the 13,000 points level as its new support level. For now, my stock options picks subscribers and me are totally enjoying the profits especially on our existing trade in ROK which is now up 50%! Check out my Master's Stock Options Picks service now!

For now, the Dow turned all out bull trend.

Lackluster Trading...

The Dow moved sideways, gaining 14 points today in a quiet day without any major economic release.

Fundamentals
Investors bought into the encouraging jobs report last Friday but buying remains somewhat lackluster as investors continue to be cautious. Bond yields remained relatively unchanged as investors are reluctant to move back to equities in a big way. Total equities put call ratio continue to linger in the 9.0 to 1 range as options traders continue to be uncertain as well. Indeed, this is yet another period of uncertainty due to uncertainties surrounding the Syrian issue. However, it is expected that whatever effect the Syrian issue may have on the market will be short term. Over the longer term, the US recovery scenario remains intact.

Technicals
The Dow has successfully climbed back above its 30MA since my last post and will now challenge the 13,000 points resistance level. It is going to be a hard level to break but with the Dow now short term oversold, along with a nice 30MA retest continuation pattern, the Dow now has a real chance at breaking the 13,000 points level.

For now, the Dow remains in short term neutral trend and intermediate, primary bull trend.

Oversold Rally...

The Dow gained 78 points today on bargain hunting and encouraging jobs indicator.

Fundamentals
The Dow took back some lost grounds today as bargain hunters reallocate back into equities. Bond yields rose as investors once again returned to equities. Total equities put call ratio is lower but is still lingering around par which continues to suggest short term uncertainty by the options traders. This Friday's jobs report may be the catalyst the market needed to stage a breakout for further highs.

Technicals
Since my last post, the Dow has done everything I expected it to do... linger around the 13,000 points level despite better economic data and then retreat to the 30MA or 50MA level before it can muster enough strength for a breakout. The Dow is currently short term oversold, finding support around the 30MA level, which is extremely encouraging. We need to see the Dow get back above the 30MA before we can validate this support. For now, the market remains at danger of revisiting and testing the 50MA level as this is that overdue intermediate correction I have been talking about.

For now, the Dow turns a short term neutral trend within an intermediate and primary bull trend.

13,000 Points Yet Unbreakable...

The Dow went sideways today, closing marginally lower by 1 point as better than expected economic data brought the market back up from a red morning session.

Fundamentals
Weakness in European market led to a negative opening session this morning but was rescued by better than expected Pending Home Sales and Dallas Fed. Economic data continue to pour in better than expected recently, providing the support the market needs to move further. This is the first week of March 2012 and of course we would be getting the two super heavyweight economic data; ISM Index and Jobs Report. Better than expected performance on these two numbers would certainly help the market break out of the current stalemate. Investors rushed back for the safety of bonds today, depressing bond yields while options traders continue to keep total equities put call ratio close to par as uncertainty continues in the market.

Technicals
The Dow is currently up against an extremely strong 13,000 points psychological resistance level. The Dow usually makes a significant retreat to perhaps the 50MA level in the face of such strong resistance before it has enough energy to stage a breakout. In fact, we could see such a retreat occur even with better than expected data over the next few days.

For now, the Dow remains in all out bull trend.

Technical Bulls and Bears Battle It Out!

The Dow gained a marginal 15 points today as the bulls struggled against the bears.

Fundamentals
The optimistic Chicago Fed released before market took the US market higher right from the start all through the morning after this President's day long weekend. Early strength was quickly taken back by a horde of marauding bears, taking the market back all the way down to the breakeven line. Investors still reallocated back into equities, raising bond yields across the board and options traders continue to trade in favor of call options. As such, today's afternoon weakness is likely only a short term profit taking action.

Technicals
Resistance between the 12,800 and 13,000 area is extremely strong right now and with the market overdue a significant intermediate retreat, this could be dangerous. The Dow needs to hold above the 30MA to stay safe but its really just a matter of time now the correction begin.

For now, the Dow remains in all out bull trend.

What Are Debit Spreads?

Wrote a free tutorial on what Debit Spreads are for Optiontradingpedia.com.

Enjoy your President's Day holiday!

Dow Retreats Despite Better Empire State Index

The Dow retreated 97 points today despite better than expected Empire State Index.

Fundamentals
What was an amazing performance on the Empire State Index was overshadowed by a worse than expected Industrial Production, leading to a mixed morning session which was ultimately overshadowed by short term profit taking. Bond yields remained stable with long term bond yields rising as investors take a longer view on equities. Options traders took total equities put call ratio above par in favor of put options trading once again inline with what happened in the market today. Indeed, this is a period of rather good economic data faced with lots of profit taking and resistance and is a period which will require continued better than expected economic data for the rest of the week in order to see a breakout. Good thing is that the trend of economic data seems to be upwards for this period of time so odds are still good for some more upside.

Technicals
The Dow continues to struggle around the 12,800 points resistance zone as its 30MA continues to catch up. Even though the resistance around this area has been significant, strength is significant as well with the breakout candle low holding strongly. It should not be long before a breakout occurs.

For now, the Dow continues in all out bull trend.

Dow Continues Sideways...

The Dow gained 72 points today on bargain hunting.

Fundamentals
The US market did an impressively positive day today in a quiet day without any major economic releases. Nothing much has changed since my post last week, the better than expected jobless claims last Thursday also failed to provide the stimulus needed for a true breakout. The leading indicators coming up for the rest of the week might just do the trick but trading is still expected to be conservative ahead of the President's Day long weekend. Even though the market has been largely sideways for the past week, I still took a nice 43% profit on HES using my Star Trading System. My leveraged managed account service will also be launched this week with an expected reward risk ratio of 6:1, email me at founder@mastersoequity.com if you wish to be on priority list.

Technicals
The Dow continues to bouncing along sideways atop the 12,800 points resistance zone. However, it is now way off short term overbought condition and its 30MA has already caught up with it and provides short term support. This means that the Dow is once again ready for a breakout and that might happen on the back of better than expected leading indicators coming up this week.

For now, the Dow remains in all out bull trend.

Dow Continues Sideways...

The Dow gained marginally by 5 points today in a volatile trading day.

Fundamentals
Investors were back and forth today as fundamentalists buying into the recovering economic outlook battle technicians selling into the resistance. Intraday range was volatile but also limited due to a lack of strong catalyst on either front. However, the fact that the market was generally higher by the end of the day shows that strength in the market is still significant. Tomorrow's jobless claims is this week's highlight and any surprise on that front might be the catalyst the market needs to go either direction.

Technicals
The Dow continues to struggle around the 12,800 points resistance zone following last Friday's marginal breakout. However, it seems like there are plenty of strength in the market with the bulls taking back lost ground most of the time despite the Dow being in short term overbought condition and overdue a pullback. In the face of such uncertainty, it is always better to have a longer outlook and there is no doubt the longer term outlook is positive.

For now, the Dow remains in all out bull trend.

12,800 Gravitational Pull Still Strong

The Dow moved sideways today, closing down marginally by 17 points.

Fundamentals
After last Friday's explosive day, a few sideways days is to be expected especially on a day like this with completely no economic data release. Short term traders took some profit off the table while some investors reallocate back into the safety of bonds. However, nothing in the cards suggest that there is a change in general market sentiment especially after last Friday's powerfully positive jobs report. There is no doubt the US economy is still recovering despite some toxic waste remaining here and there, especially in the Euro zone. However, it is just a matter of time world markets will enter an extended period of volatility again on toxic waste clearing like what we saw back in the 2005 period and I think the time might be soon.

Technicals
The Dow made a run for it last Friday and barely broke the 12,800 points resistance level. However, it is clearly still within the gravitational pull of the 12,800 points zone and could still turn around for a short term retest of the 30MA before it has energy to prove this breakout as a real one. This is especially so with the ever declining average trading volume since this bull leg begun last October. In fact, the market might require a correction as deep as the one last November in order to create better entry points and woo some traders and investors back.

For now, the Dow remains in all out bull trend.

US Market Rallies On ISM Index

The Dow gained 83 points as ISM index continues to grow.

Fundamentals
ISM Index continues to show growth this month, encouraging investors back into equities. Bond yields surged across the board as investors reallocate back into equities. Options traders continues to keep trading in favor of call options as bullish sentiment continues. However, despite today's rally, the market is still largely range bound and it will certainly take a strong number on Friday's Jobs Report for the bulls to continue.

Technicals
Even though today's rally was encouraging, it is still nothing more than a continuation of the Dow's sideways struggle around the 12,800 resistance zone. In fact, the Dow failed intraday at the 12,800 level today so it is evident that the resistance is still significant. However, the Dow is now off its short term overbought condition and may soon muster enough energy for a breakout. So far, there is nothing in the cards to suggest that the Dow is going to fail at this level once again.

For now, the Dow remains in all out bull trend.

Dow Continues To Struggle...

The Dow continued to move sideways today, closing marginally lower by 6 points.

Fundamentals
What started out as a dismal opening turned around on much better than expected Dallas Fed Manufacturing Survey at 10:30am, taking the Dow all the way back up to breakeven and the Nasdaq Composite into profit. Investors are definitely uncertain right now as the general sense of the market being overbought is now overpowering. Bond yields continue to drop as investors slowly reallocate back into the safety of bonds. Indeed, the market has been trading cautiously with plenty of short term profit taking over the past 7 trading days and it is certainly going to take some good surprises in the heavyweight numbers this week to convince investors to return.

Technicals
The Dow continues to struggle around the 12,800 resistance zone as I have expected. It is going to take at least a retest of the 30MA in order for the Dow to gather enough potential energy for a breakout. At this stage, there is nothing to suggest that the Dow is going to fail at this level for some significant correction once again. In fact, there are plenty of evidence to the contrary. So, lets be patient and nimble and wait for signs of confirmation.

For now, the Dow remains in all out Bull Trend.

US Sales Data Disappoints...

The Dow closed slightly negative today by 33 points as sales data disappoints.

Fundamentals
Sales data today turned in worse than expected, resulting in a deep red opening. However, the general sense of optimism in the market continues as investors and traders stepped in almost immediate and took the market off its lows. In fact, the NASDAQ Composite managed to get back into positive territory. This proves that the general sense of optimism in the market is strong enough to hold off or overcome bad news in the market which would otherwise have resulted in a significant down day in a generally pessimistic market. The rest of the week is littered with important economic releases such as Wednesday's FOMC Announcement, Thursday's jobless claims and Leading indicators as well as Friday's GDP. It can be expected that a worse than expected showing would have limited impact on this generally optimistic market while a better than expected number would provide the catalyst needed for the bull market to continue.

Technicals
It is interest to see again and again how fundamentals coincide and support technical predictions. This time round, the disappointment in the sales data coincided with the 12,800 points resistance zone which I have been talking about over the past few days. We could see a breakout over the next few days if economic data continues to do well. However, this up leg is looking more and more overextended and I expect a significant testing of support level (perhaps the 30MA or 50MA, nothing too deep) should a breakout happen over the next few days.

For now, the Dow remains in short term, intermediate term and primary bull trend.

Happy Chinese New Year!!!

HAPPY CHINESE NEW YEAR OF THE DRAGON!
It is Chinese New Year today, signifying the beginning of the Chinese year of the Dragon. Here's wishing all of my Chinese readers all over the world a very happy and prosperous Year of the Dragon! Gong Hei Fatt Choy!

Unlike western mythology, dragons are not symbols of evil in Chinese culture but rather symbols of good fortune and prosperity. So, is the year of the dragon going to usher in a prosperous bull market? Well, at least so far, 2012 is shaping up to be quite encouraging. The overall recovery pattern that started back in 2009's bottom pivot is completed with a successful intermediate retreat and continuation in 2011. There is no doubt now that the market is in recovery mode even though if you only realized it now, you would have missed a bunch of profit already.

The January Effect, also known as Capricorn Effect, seems to be back in the market this year as the Dow gains a nice 2.4% last week as economic data continues to be largely better than expected. The Dow has gained a total of 4.1% this month so far and it is now up against the 12,800 points resistance level. This was the very level which resulted in the nice double top formation leading to last July's intermediate correction. With the Dow in short term and mid term overbought condition, I would expect some struggle around this area before a committed breakout and continuation of the bull market. In fact, the Dow could retest its 30MA before mustering enough energy for a real breakout.

Overall, I am bullish on the year of the Dragon and will certainly be re-opening my managed account service so that I can help more people make more money this year! Those of you who wish to be on the priority queue for this service, please email me at founder@mastersoequity.com . Let's make the year of the Dragon the most prosperous one ever!

Dow Gains Despite Poor Philley Fed

The Dow gained 45 points in a rocky trading day on poorer than expected Philley Fed.

Fundamentals
US market opened positive today on better than expected Jobless Claims data before being mercilessly slaughtered by a poorer than expected Philley Fed released at 10am. However, the general sense of optimism in the market overcame the short sell-off, leading to a rocky but steady climb. Investors continued to return to equities, http://www.blogger.com/img/blank.giflifting bond yields across the board. Option traders also continued to trade in favor of call options, depressing total equities put call ratio. It is clear that the general sentiment in the market is a bullish one in which positive news have greater lifting effects than the depressing effects of negative news.

Technicals
The Dow continued to climb steadily on a steadily rising 30MA. This is an extremely healthy climb with some volatility expected around the 12,800 points resistance level. Tomorrow is options expiration day for January options and will no doubt be a slightly volatile day.

For now, the Dow remains in short term, intermediate term and primary bull trend.

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stufffortreos

Empire State Index Beats...

The Dow gained 60 points today spurred by global optimism and better than expected economic data.

Fundamentals
A wave of global optimism swept across the global before US market opening, lifting index futures. The optimism was then supported by a better than expected Empire State Index before US market opening, leading to a strong morning session before short term profit takers stepped in in the afternoon. It could be a pretty rough week ahead going by the way investors are going back into bonds and the VIX rising in a supposedly strong day. As such, I won't be surprised to see a few negative days going forward.

Technicals
The Dow has been climbing steadily so far and seems due for a little pullback and a retest of the 30MA or the 12,200 level for support before the market can move on higher safely. There is nothing in the cards that suggest that such a pullback might lead to something uglier, as such, it could make a good accumulation point when it happens.

For now, the Dow remains in a short term bull trend within an intermediate neutral trend and primary bull trend.

Dow Crawls Along...

The Dow continued sideways today, closing marginally lower by 13 points in a mixed trading day.

Fundamentals
Global investors were hit with sanction threats from Iran which could affect one fifth of global oil supply, something which will raise oil prices and put pressure on equities. Investors struggled against the general sense of optimism in the market against the news and managed to close the day close to par. Investors rushed back for the safety of bonds today, depressing bond yields across the board strongly but traders seem to be more optimistic as they accumulated into the exodus, providing strength to return to breakeven throughout the day. Options traders also continued to keep total equities put call ratio significantly below par in favor of call options trading. All in all, the general sense of optimism in the market seems to be holding up against bad news globally so far and we should see a run at the very next good news, perhaps a surprise in Thursday's economic numbers.

Technicals
Even though the Dow made nothing more than a sideways day today, it did attempt to continue the bull run yesterday, which is a very good sign under a total lack of catalyst. I would just need one good continuation run to turn the intermediate trend back to bullish. So far, the bull run over the past few weeks has been slow and steady and that's the way to go.

For now, the Dow remains in short term bull trend within an intermediate neutral trend and primary bull trend.

Totally Sideways...

The Dow struggled a gain of 32 points as the market continue to go sideways after last week's huge gain.

Fundamentals
There were no economic data or news driving the market today, resulting in a lackluster trading day. Bond yields and total equities put call ratio remained largely unchanged as sentiments remained unchanged from last Friday, which is always a good thing on Monday. Tomorrow's sales data may well provide the catalyst needed for the market to continue, upwards.

Technicals
The Dow continued to move sideways today as I have expected following last week's single day rally. Almost all big up days are followed with a few days (or up to a week) of sideways or slightly negative trading as traders take short term profit. The Dow still needs to find strong support around the 12,200 area in order to secure more upside. This may take the form of either a single day or intraday pullback to that level with the way the economic data is pushing the market right now.

For now the Dow remains in short term bull trend within an intermediate neutral trend and primary bull trend.

Sales Data Beats!

The Dow gained 21 points today as economic data continues to recover.

Fundamentals
Despite early short term profit taking, better than expected sales data today encouraged investors to return to equities gradually throughout the day, taking the market back into the green from a red opening. Indeed, the recent trend of better than expected economic data seems to have caught up with investors at last as they cautiously return to the market despite uncertainties in the Euro zone. In fact, this Friday's jobs report might be the catalyst needed for at least a short term bull trend.

Technicals
A largely sideways day in the market as expected following Tuesday's strong rally. Even more encouraging is the fact that the Dow seems to be holding the recent breakout strongly. Expect a couple of sideways days more and we should see the Dow continue upwards as long as the 12,200 support level holds. When that happens, we could then call an intermediate bull trend.

For now, the Dow turns a short term bull trend within an intermediate neutral trend and a primary bull trend.

Happy 2012~~!!!

Happy New Year 2012!

This is my first post for the year 2012 and 2011 has truly been a challenging one.

Surprisingly, even though 2011 proved to be uncertain and painful most of the year, 2011 actually turned out to be a slightly positive year overall with the Dow gaining 5.5% and S&P500 closing at par with 2010's close. The Dow also made a third year of gain since 2008, which on a yearly basis, continues the recovery scenario.

So far, the recovery from the 2008 crisis has been volatile but steady with volatility coming mainly from the Euro zone. I would see 2012 as a year of resolution of most of the global issues arising out of the 2008 crisis before the real bull market can happen. However, the market is also at a point where it could easily melt back down into an intermediate bear trend or primary bear trend if we don't see a breakout and strong support around the 12,500 level.

Indeed, the world is in uncharted territory and much has changed since the 2008 crisis in terms of investments as well as business. We need to be able to cohttp://www.blogger.com/img/blank.gifnstantly adapt to the changes and adapt our mindsets as well. Investors need to be more and more patient and be able to expand their arsenal of investment weapons in order to profit consistently under such market conditions. It is no longer enough to be able to profit under trending conditions (using swing trading methodologies such as my Star Trading System) but also under volatile sideways conditions (using position trading methodologies such as my Ride the Flow system). Yes, this is the era of the sophisticated investor and even small retail investors and traders require such sophistication to make any kind of profit.

As such, I would say the theme of year 2012 for most retail investors and traders would be "EDUCATION". Most have seen how hard it is to profit in 2011 and this should trigger the need to get more sophisticated and educated. Remember, the first investment for all profitable investors and traders is in oneself.

Here's wishing everyone, an exciting and fulfilling 2012!