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The End Of QE2-Quantitative Easing

Today, marks the end of quantitative easing part two. Quantitative easing (QE) is an unconventional monetary policy tool used by the Federal Reserve to stimulate the national economy when conventional monetary policy has become ineffective. Of course that doesn’t mean the there won’t be a QE3 and QE4. The policies of the Obama Administration have damaged our economy and I’m not surprised at the Federal Reserve for having to step in to try to save it. We’re in dire straits with the current economic situation, it’s hard to believe that we can turn things around in the next few years.

Watching the stock market in this past week would have others believe that we’re out of the woods and on the road to recovery. Instead what we’ve seen in the last four trading days is the smart money getting back into buying equities since the recent healthy pull back on the DOW. I’ve spoken about this before in detail of how when the markets or even good solid stocks pull back 8% from their recent high, you must “back up the truck” and load up for a strong rally that will be happening soon. Eight percent is a benchmark that I use to make decisions on when to jump into a stock or the overall market. Time and time again it has been useful and profitable for traders to follow this method.

If you’re new to investing in the stock market or have been around awhile, this is something you need to keep in your trading playbook. something else to keep in mind is when stocks or the markets move up 8%-10% in a short period, it’s time to unload some of your shares to keep the gains you just made. So far in the last four trading days, the DOW has gain nearly 4% from it recent low. Remember, pigs get slaughtered, so don’t be a pig and try to ride out the wave a little longer. Be happy with the gains you’ve made. Since emotions are not welcomed when trading stocks, don’t be mad or angry if you miss out on some profits because you jumped out too early. Stocks will always have a pull back and with the gains you made, you’ll have capital to trade another day.

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The DOW Closes Above 12,000

With the DOW climbing 148 points today and closing at 12,040, many are wondering if it can sustain this level. The DOW hasn’t closed above the 12,00 level since June 2008. It’s been a long two and a half years to get back to this level, but are we out of the woods yet?

I’m no expert, but I will say that any average Joe can see that the economy has not recovered no matter what the “reports” say. I travel a lot and where ever I go, I see many establishments that closed in 2008 and to this day most of them are still vacant. I know in the county I live in, the unemployment rate is nearly 14% and the state’s level is “projected” at 10.1%. I say “projected” because who are they trying to fool with that report? How many people are no longer collecting benefits and are still unemployed? They’re no longer being counted which according to realistic estimates, puts the national rate some around 18%-19.5%.

What about the housing market? The average home prices are starting to stabilize, but no one is ready to get out there and start buying property again. A report was released this week showing that over 11% of the homes in America unoccupied and more people are looking to rent than to own.

One thing we can see from over the last two and a half years is which companies were strong enough to weather-out the storm. I’ve been able to see some small cap companies grow in value at a steady pace with expected pull-back from the profit takers, only to continue the climb up. There are others that I’ve recently discovered that look to be contenders in a couple of years.

For the last few months I’ve been sitting on the sidelines watching the market. I’m not confident with the markets, the economy or the government at this time. Yes I have missed some good gains in stocks that I was invested in, but I sleep better just sitting it out right now. I love the stock markets and will always be involved with it, so for now I’ve been looking at some short/long term (2-4years) small caps that I will be investing in soon enough. I’m just waiting for a healthy pull-back (6%-9%) at then I’ll make my trades.

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Penny Stock Alerts

If you spend any time researching companies that you’re thinking of trading stock in, I’m sure you’ve seen the advertisements, the pop-up windows and the e-mails informing you of different websites that will give you alerts on penny stocks they believe will make you some great gains.

The only problem that I see with that is you really don’t know the person who is running the website. Quite a few of them are actually fund managers that use you to help pump up the price of the stock to help them make more money. Of course I’m not saying that all of them are like that but you need to be aware of who you might be dealing with.

I myself subscribe to many different alerts from websites just to see what’s going on. In many cases I watch their picks to see if they’re going to be right or wrong. Unfortunately many of the picks don’t really go anywhere after the initial jump. How I see it, many of these website/traders position themselves in a company, start hyping it up and tell their readers/subscribers that it will do great for them. As the price goes up they start scaling out their position. Most of the stocks that I’ve been watching over the last two months from these alerts would have lost me thousands of dollars. Don’t get me wrong, I would have made money on some of the picks, but not as much as I would have lost.

The latest stock that I’ve seen being pushed is Biocentric Energy Holdings (OTC:BEHL.PK). I saw this being pushed by several different websites. I figured that this too would be another pump-and-dump fiasco as I’ve seen before. I even saw some talk on a penny stock forum of how this is being pushed. The stock price was $0.023 per share when I first received the alert, after three positive days where it went to $0.07 I was waiting for the price to fall. To my surprise, it still hasn’t started to lose momentum. As of this morning, the price per share was to to $0.14, a gain of over 500% in just a week or so. If you were one of the many that jumped into this investment, you need to get out now. I’m telling you that this will not be in the category of “best penny stocks 2010”. The company doesn’t have anything really going on to sustain the gain in price.

I’ve talked about it before and said that buying penny stocks can be very rewarding, but at the same time you can lose a ton of money. Be careful when you trade penny stocks, even more so than you would with bigger cap companies.

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Stock Market Game

I’ve said it many times, and I stand by it; Stock Trading Is Not A Game. It doesn’t matter if you’re a trader or an investor, you must do your homework by researching every stock you plan to invest in or trade But what if you could play a game and practice investing without risk? You could have fun “playing”, while learning and understanding the stock market even more.
I stumbled upon a free website where you can trade stocks on a virtual Wall Street. UpDown.com is a free fantasy investing site. People join UpDown to practice investing and can earn money for winning contests. Start with a $1,000,000 cash reserve and start trading stocks immediately after registering and creating a profile. With up-to-date news information along with an active forum for members to share ideas and investment strategies.
The UpDown is a community for people interested in investing in the stock market. If you’re new to the stock market or have a few year under your belt, this site will give you the chance to try different strategies without any actual loss of money.
UpDown.com provides a platform where investors can view, share, and rate high-quality stock analysis and investment ideas. They then filter, aggregate, rank, and present the community’s investment recommendations for the benefit of all UpDown members looking for valuable investment advice.
Click the banner below, or the one in our sidebar to join. I just joined myself and it looks like a good place for me to test out new strategies that I normally wouldn’t, with my own money.

Free Stock Market Game

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