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Yesterday, my word for the day was “conflicted.” Today, David Moenning over at State of the Markets has his word for the day and it is …
- The word of the day appears to be weakness.
One reason he is suggesting this is the overseas markets are showing weakness from a lack of encouraging news.
- Asian stock markets are down across the board this morning in response to weaker-than expected FDI data in China, which showed inflows hitting the lowest level in at least two and one-half years.
- The ZE...
Monday saw shares of Avanir Pharmaceuticals soar on positives news from a mid-stage study on the company’s new Alzheimer’s drug AVP-923. Shares climbed $5.24 on the news.
Unusual Options Activity
At least one trader anticipated positive news from the study. Monday morning at between 9:38 and 9:39 am EST saw a trader come in buy 650 AVNR Sep 10 Calls for $0.39. Less than 10 seconds later, another 1,245 contracts in the same line were purchased.
What Does This Mean?
With the potential to ...Read More
Measuring investor sentiment has always played a big part in my trading.
All trend reversals will almost always take place at sentiment extremes. It is just the way the markets work, when too many are bullish or bearish on the stocks, they will have high odds of reversing the trend shortly after.
I developed a few short term sentiment models that measure how traders are positioning their portfolios with bonds to stocks. When it showed traders were flocking to bonds, it meant fear was in the m...
December Canada dollar futures a selling opportunity on more price weakness. See on the daily bar chart for the December Canada dollar that prices are in a steep downtrend and have recently hit a 5.5-month low. The bears still have downside technical momentum to suggest prices will continue to trend sideways to lower in the near term. A move below technical support at last week’s low of .8990 would become a selling opportunity. The downside price objective would be .8800, or below. Technical ...Read More
On September 2 I wrote about an attractive short scenario in gold associated with a breakdown from a large symmetrical triangle formation. That breakdown ended up being pretty decisive. The evidence favors further downside ahead.
Specifically, in addition to the poor price structure, I'm looking at weekly momentum. Take a look at RSI averages at the bottom of the accompanying chart. The slow average stalled around the 50 midline in April. In the past two weeks, the indicato...Read More
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I was in junior high school the first time I was introduced to Market Profile. My Dad was a grain trader and the hedge manager for Ralston Purina, a huge manufacturer of animal feeds, not to mention the creators of Chex cereals and Rye Crisp crackers. He spoke of a friend, Peter Steidlmayer, who was devising a different way to look at markets. “Any interest in this, son?” Off I went on my skateboard as trading was not on my list of priorities, yet.
Years later, struggling to learn to trade, I ...
This month marks the sixth year after Lehman Brothers filed for Chapter 11, an act that served as a precursor to market meltdown of October 2008.
Six years later, and despite the amazing recovery for the general market since the market bottomed in 2009, the financials as a sector continues to lag.
Figure 1, the 10-year PerfChart for the S&P Sector ETFs, depicts the Financials relative weakness during a decade plagued by low interest rates that created an environment for risk taking ending...
Get ready for the most active season in the stock market.
The last quarter has the highest trading activity of the year for the stock market and for the market in general.
Here are some of the major events that traders are ready to speculate upon heading into the fourth quarter:
1. Last earning season of the year – main reason why market will accelerate its action into the year end
2. Black Friday / Cyber Monday so-called Cornucopia Trading
3. Christmas Rally
4. Quarterly Expiration /...
With the Dow recently surging past 17,000, the debate is on about whether it is a bubble that is looking for a pinprick or if it is a strong bull market that will power past 18,000 and beyond.
Yes…it could definitely go to 18,000 or 19,000 or more in the short term because the main driver is not a bullish economy…it is the bullish impact of Federal Reserve policy. In other words, this is an artificial bull market that is driven by monetary stimulus. The danger of a pull-back or a sharp correc...
Performance anxiety for traders is the fear, or persistent phobia which may arise in a trader by the requirement to take a real trade, in real time, with real money whether actually or potentially.
There are many causes of this anxiety which many times leave a new trader with too much fear to really trade. Fear sends them out of the markets to go join the 90% that did not make it. This fear can arise from past losses that were so big and traumatizing that a trader can’t bear the potential of...Read More