Stock Market Technicals

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I’ve been warning many of my readers that the stock market will take a dive very soon and from the looks of the last few days, that time has come. If you look at stock market technicals, you are aware that the DOW at a level of 7550.00 is a level that would cause many sell-offs to happen.
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Today’s lows of the DOW was 7551.01, which came very close, but not to the point where the sell off would have occurred.
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I said it before and I’ll say it again, you need to keep plenty of money on the sidelines for times like these when the prices for stocks in good companies are at a great “sale” price. These companies are not damaged, just the stock prices are. You need to be ready to take advantage of these buying opportunities to help grow your portfolio during a bad economic down-turn.
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For those of you that have had patience over the last month or so, this just might be the time for you to jump in and build a good solid position in the companies that you’ve been watching. I’ve been holding back in jumping in with both feet and with the stock market down at these levels, it’s hard not to just dive in head first. Of course I won’t involve my emotions in the markets.
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Who knows where the markets will be in a month or two from now. Especially with the fact that Obama’s stimulus plan hasn’t really been accepted by Wall Street and Main Street. On the news of the plan being approved, the Dow has dropped quite a bit. The markets can hit that crucial level of 7550 and all bets will be off, the sell off will begin and it won’t stop until it get to about 7300 basis points. Then again it may just take back off to the 9000 level just like it did not too long ago.
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No matter what, the rest of 2009 is going to be a total washout and the only way to get your portfolio to grow is to make trades when the time is right and then get out while the getting is good. Either way the market may go either way over the next couple of days, you should keep an old saying in mind, ” hope for the best, but prepare for the worst”. This way you’ll be ready without being disappointed.

Tags: Diversified, Economy, Getting Started In The Stock Market, How to make fast money, Stock market for beginners, Stock market news, Stock trading, The Week Ahead

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Investing Mistakes To Watch In 2009

Hello everyone. Are you ready for 2009? Now that we can put 2008 behind us and hopefully all the issues that went along with it, let’s get to some good trading for the new year. Like last year we want to limit the investing mistakes that can easily happen if you’re not careful. So let’s look at what we can avoid to help us in the new year.

The number one mistake that people make and if you were one of the millions that lost money last year, you just might be thinking of doing this. The biggest mistake that you can do is to not invest at all. Sitting on the sidelines watching it happen while no investing is number one mistake. Even if you can invest $20 a week, it’s better than nothing at all.

The longer you put off investing, the less you’ll have when it’s time to retire. Of course you have to have your current financial situation in order, but once that’s done, you have no excuse not to be investing.

Another mistake that people make when investing is they try to get rich quick. Let’s get one thing straight, trying to get rich quick is not investing, it’s gambling. If you want to gamble, go to Vegas. Investing is a long time strategy not a quick fix approach to financial security.

Mistake number three is putting all of your eggs in one basket. If you want to invest, you need to spread the capital around in different areas of the markets as well as different vehicles (i.e. stocks, bonds, CDs etc.). Doing so will help keep you from losing any of you money in one big sweep. Stocks and other types of investment vehicles will go up and down, but not all of them will go in the same direction at once.

Collectibles are not investments. Yes, the first issue of Spiderman is worth a lot of money, but it won’t grow all that much in the future. Don’t expect to sell it to help your kids through college.

I hope that these tips will help you in the coming year. Be patient and happy trading.

Tags: Diversified, Getting Started In The Stock Market, Help, Stock market for beginners, Stock trading

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Safe Investments

Now a days it’s really hard to find any decent safe investments. The old buy and hold routine doesn’t work in these trouble times, and as for trying to day trade, you’re taking your hard earned money in your own hands.
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A safe Investment right now seems to be in CD’s, bonds and Treasury bonds, but the problem there is that the return is quite low. After having your portfolio, need it be a discretionary one or your 401K/IRA, beaten up as bad as it has in the last year. Some may not want to deal with a 3% return on their money and have it tied up for nine months or longer to get it.
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High yield safe investments like junk bonds aren’t any better. They involve alot of risk and again after what we’ve gone through, do you really need more risk?
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The only safe investment advice that I would be comfortable giving you is to do your research into strong companies (of course you won’t know they’re strong until after the research) that have been beaten up because of the market as a whole brought the price down.
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One company that has taken a beaten because of the hedge fund redemption is Quanta Services Inc. (NYSE:PWR). The company has a great balance sheet and has orders out until 2010. They are expecting great numbers in this quarter. Thursday the stock hit a new 52-week low at $12.27. A level that hasn’t been seen since February of 2006.
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I don’t consider too many stocks to be a safe investment the way the markets have been moving. Monday morning the DOW opened at 9,141.01 and the intra-day low on Thursday was 7,979.60, but then closed Thursday at 8,835.25.
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The safest investment right now might be not investing.

Tags: Diversified, ETF and Mutual Funds, Getting Started In The Stock Market, Hedge Funds, Investments, Stock market for beginners

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What A Wild Ride In The Stock Market Today

photo by Hagerman
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No matter what good news may be out there to trade on, someone else will sell on that same message. The Markets again for the second day trades lower. The Dow closes down almost 6% with most of that lose happening in the morning hours, but at one point it was down nearly 700 points.
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In after market trading Amazon fails to beat the street with their earnings report, while Amgen beats what was expected from them today. Amgen has actually raised guidance for next year. What are you to do with this news? Nothing. For one by the time you’re able to get into Amgen the news will be priced into the stock. As of right now in after market trading Amgen is up $3 per share and the news just came out Secondly in this volatile market that we’ve been seeing, in the next couple off days we could see another major down day and see the stock drop below it $49.73 close price of today.
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Freeport McMoran Inc (NYSE:FCX) Has taken a beating in the last few weeks or so that has the price down to a new five year low. If you have five years to wait before you need you money, this might be the stock for you. In regards to the basic material sector, these stocks have been dealt a blow that will take some time before they really come back to the level that they were at this time last year. If you’re a veteran trader I’m sure that the UltraShort Basic Materials ProShares (AMEX:SMN) is something that you’ve been following if not trading . The stock was at $66 just two days ago and hit an intra-day high of $92.97 in the last 20 minutes of open trading today.
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If you’re going to trade in this volatile market, you need to know how to play both sides of the trading floor. You need to diversify your portfolio and understand what shorting can do for you. It something that I recommend for average traders to do until you fully look into how it’s done.
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In the last two days the Dow has lost nearly 700 point (almost 8%), but because of how I trade and hedge myself, I’ve increased my portfolio over 15% during the same period. Do your homework, double check your research and follow through with your due diligence.

Tags: Commodities, Diversified, Earnings report, Getting Started In The Stock Market, Stock trading

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I’m Glad That This Week In The Stock Market Is Over

What a week we had in the stock market. On Monday the DOW fell 733 points to start off the week and dropped another 127 points on Friday to end the week. The good news is that the the Dow is up over 4% for the week. Go figure.
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That’s right, some how the markets were up even with all that going on. This past week has shown us the intensity of volatility in the markets. I have to say that this was a great week for people who rode out this roller-coaster ride in one of two ways.
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If you were one of the many that didn’t know what you should do with all the “The Sky is falling” news and figured that you don’t need any of your investment money. You decided to just let your money sit where it was at and ride it out. If you were properly diversified you most likely did pretty good. Most of the sector and different markets came out ahead for the week (Friday to Friday). Being diversified is what it’s all about if you want to stay afloat for the rough times so you can maximize your return over the long haul. I commend those of you that are prepared.
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The other way is if you knew what you were doing throughout this period of six trading days and saw the writing on the wall each of those days and at different times of the day. You most likely made a killing. The volatility was off the scale. With days that had over 500 point swings, it was easy to be able to pick up some broken stocks (of not-broken companies) and watch as the investors got back into them after they were oversold. Waiting for those quick returns of 5-10% gains. In some cases, there were returns of 30% a better.
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Throughout the week there was a lot of news as well as action to keep one busier more than one would care to be, but I found it very educational. I do have to say that I’m glad that it’s over.