Keynote (Friday, August, 2010)

Cut the Risk in Your Portfolio by 75%!

Option Spreads is the perfect way to approach the stock market in these volatile, changing times. This is how professional traders (i.e. people inside the walls of financial markets - the Floor Traders, Institutions, Fund Managers, etc) approach the market, cut their risks, protect their portfolios and build wealth in a steady and consistent manner.

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Keynote (Friday, May 14, 2010)

What is happening on stock market charts provide the most accurate clues, NOT news or "expert" opinion. Continue using charts to plan your practical opinions and tactics.

Volatility is still expanding and is moving up enthusiastically. This translates to fear expansion that will ultimately take US Market lower.

US Dollar and Gold usually moved opposite of each other, but not this week - Gold & Dollar both went up. This adds to the worries since Gold is an indication of flight of fear.

Please note that we are now in a complex global economy and we have very limited influence on overall picture. It is not the same as it was when we only had to understand the economy of the United States. If you want to be ahead of the pack, take regular note of Futures; Asia markets on Sunday night; and Europe early Monday morning, before the US markets open. It will help you to see when special news events have a significant impact, so you can plan appropriately for the day and near future.

Keynote (Saturday, May 8, 2010)

This market is still pointing lower. See Chart. I think you definitely must entertain at least the idea this market will not only test the February 2010 low, but may also go down through it.

However, the increase in volatility will make for sharp rallies along the way. This is Options players dream come true!

Do not forget the market had been climbing a wall of worry, since March 2010, about concerns about the Euro zone's sovereign debt crises and its contagion to other countries. The recent US GDP growth was also below expectation offsetting optimism about the economic recovery.

Keynote (Friday, May 7, 2010)

A Memorable Day!

Yesterday was a very memorable trading day in US stock market. Over the past 9 weeks, there were various signs of deterioration leading up to this downturn in the market yesterday. The clues were in the charts!

Knowing what to do, when others are panicking, is how a few pros, make their best record days.

Keynote (Thursday, May 6, 2010)

In a disturbing moment like this, it is instructive to look at the big picture of the market. When you zoom out to the monthly chart of SPY, you can see the ETF has made a double top in 2007. The steep decline that followed completed this bearish pattern by taking out the low of 2002/2003. Extremely oversold, SPY started a v-shaped rally from the March low of 2009, which caught by surprise many traders and stunned them by its ongoing strength. However, it seems that the market has reached its limits after testing resistance at the 61.8% Fib retracement level. It is already overbought and overvalued and showing not only loss of momentum but also persistent weakness in volume for several weeks. If a reversal is confirmed in a decisive manner, in the near future, it will be the beginning of the last leg down of a three-wave pattern that will take down SPY below the prior low of March 2009.

Keynote (Wednesday, May 5, 2010)

Always watch the DJ! Why the DJ is important to watch is not because it is the most representative index of the US market. It is simply because most institutions make a pride of place by carrying blue chip stocks in their portfolio at all times. As these institutions are the bigges, shakers and movers in the market, what happens to the DJ-30 is a barometer to gauge their investment mood.