Beating The Stock Market » Stock market for beginners

Stock Market Volatility

billy — Wed, 05 May 2010 02:29:16 +0000

Stock market volatility fluctuates all the time, some days more than others. Volatility in the markets grow as the gains increase along with those times when uncertainty rises.

Since the markets have risen as high as they did and the condition of the economy is still on shaky ground, I’m not surprised to see that the VIX (volatility index) jumped 20% in just one day. What does surprise me is the fact that it took so long for it to happen.

In the last fourteen months, the Dow Industrial Average (DJIA) has increased by nearly 80% and over 10% in the last three months. I’ve been saying for quite some time now about the fact that the DOW sitting at over 10,000 points has no real reason to be there. Of course many investors are still riding the wave as long as they can. Unfortunately many of them won’t see it coming when the markets take the next plunge.

Unemployment is at 12% (officially), but it is estimated to be at 17% since most people who were receiving unemployment benefits last year are no longer eligible. Many companies are holding off on hiring until they get a good look at the new tax laws that the present Administration has passed. Add on the fact that the foreclosures in the United States are not shrinking, instead they are holding steady in most areas.

The VIX is one of the indicators that should be watched on a regular basis as part of your stock market strategies. As the uncertainty in the markets rises, the VIX will climb. Many average investors lose money in the stock market as this happens because the price per share of most companies will rise and fall with large swings. If you are a veteran in trading stocks, most likely you’ve learned to read the VIX and play it accordingly.

For those who are not familiar with VIX, there are a few stock market books that will help you understand much better. In many of Jim Cramer books, you will find information about the volatility in the stock market and how to play it.

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Is This A Real Rally?

joanne — Tue, 09 Feb 2010 18:42:00 +0000

Oh well, here we go again. After spending the last week or so losing 700 points and falling below 10,000 points at the close. Everyone feels that the stock market is on the rise again. Earnings season is upon us as a matter of fact we have Disney reporting after the close. I am pretty sure that they will not beat the street. Why is that? Besides the fact that I am a season ticket holder and have seen how much business they have lost in their Parks. Their latest movie, The Princess and the Frog, did not do as well as it was expected. They also have to take into account the fact that they bought Marvel Entertainment Inc.

To get back on my original thought, It seems that the media is talking about how this rally is “real”, I don’t think so. How can it when you have sales down in many business’ and people are still losing their jobs. Look before you leap back into any stocks at this time. Yes, I know the markets have corrected themselves in the last week or so, but isn’t that what we were saying a year and a half ago? History has shown us that there is always a second bounce. It’s my opinion that we will see the second bounce some time in the first half of this year.

I’ve been sitting on the sidelines for the last few months when it comes to actively trading on a day-by-day basis. I did make some acquisitions of some stocks like Ford (NYSE: F), as well as Apple (NASDAQ: AAPL). Those trades were made for the long haul since I do have confidence in those companies and the people running them. I’m going to continue to wait for the other shoe to fall before I get back into the day trading. My advice to you is to do the same, but then again who am I?

Do what you may ,but consider yourself warned.
Happy Trading.

P.S. If you’re looking for some help in the stock market, Try out a free trial of Jim Cramer’s Action Alerts from The Street.

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Free Trial: Cramer’s Real Money Program

billy — Wed, 16 Sep 2009 16:23:03 +0000

The Host of Mad Money, Jim Cramer has been helping the average person learn about the stock market for a long time. He’s written several books on investing, as well as being the Chairman on TheStreet.com. I for one have made quite a bit of money listening to Jim Cramer.

One of the ways you can follow Jim and and the rest of the the staff is at RealMoney.com. You’ll find sound, unbiased advice you can count on.
No middle man, no B.S., no delays – just a direct line to people as they share their investment strategies, stock picks and market views, all in real time. They do have a basic no fee section of the website, but if you want to know the meat-and-potato off what’s going on on Wall Street, then this is the service you want.

I’ve been a member of The Street.com’s RealMoney program for a while and I’m not disappointed. Here’s an opportunity to try out RealMoney.com for a 14 day free trial. Click below to check it out.

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Stock Market Update

billy — Tue, 08 Sep 2009 20:29:36 +0000

The first day of trading after the labor day weekend has been very interesting. The three indicies finshed the day higher, Dow up 56 points while the S&P 500 closed at 1025.39 and the NASDAQ did the best of the three closing at 2037.77 (up 0.94%).

That wasn’t even the most worthy news of the day, that honor goes to the price of gold, which went above $1000 for the first time in quite some time. The U.S. Dollar lost value today and with that going on, the Commodity sector gained throughout the day.

This week will be a very telling sign of things to come in the near and distance future. Just to be on the safe side, I will be treading very carefully through it all. For those of you that want to try out a different trading technique but are afraid to do it in such trying times, here is a free fantasy stock market game that you can find out if those ideas will pan out.
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What can you lose? It’s FREE.

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Are You Ready To Take Adventage Of The Markets

billy — Wed, 19 Aug 2009 20:36:17 +0000

Typically the months of August and September are the two least to make gains. As people are going on their last minute vacation before the summer is over, the stock markets seem to take a break. The volume is lower than any other time of the year.

As you can see by the last couple of weeks, the markets have seen a stall in gains compared to the other four months. The overall markets are holding to their levels, but quite few good stocks have come down from where they were just a little while ago. I don’t expect them to stay there very long. At the present time, the markets are showing that they are at a good resistance level. I also see that it’s more of a bull than a bear scenario going on.

The correction in the markets seem to be happening on the individual stock levels, so I’m getting ready to go all-in. I see some of the companies that I’ve been recently coming down to levels I consider a good entry point. If the stocks do fall back after I start building a position, that won’t be a problem since I always buy in increments.

So my question to you is… Are you ready to get in (if you’re sitting on the sidelines), or build a bigger position in the companies that you own already? Do your research on those companies now, so when the time is right to get in, you will know which ones will be a great investment. If you are up more than 20% in a stock already, you might want to take profit now and get back in after the pull-back.

If you’re looking for some free advice or trading programs to help improve your trading, please check out the free trial of Jim Cramer’s Action Alert and/or Trading Solutions free trading program.
Due diligence and research is vital to surviving in the markets, so be disciplined in your trading style and remember… Happy Trading.

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Penny Stock Alerts

billy — Mon, 03 Aug 2009 15:56:00 +0000

If you spend any time researching the companies that you are 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 that they believe that will make you some great gains.
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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 you might be dealing with.
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I myself subscribe to many different alerts from websites just to see what is going on. In many cases I watch their picks to see if they are 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 that it will do great for their readers/subscribers. 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.
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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. 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.
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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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Agnico Eagle Mines Ltd (NYSE:AEM)

billy — Thu, 30 Jul 2009 19:31:48 +0000

Agnico Eagle Mines Ltd is up and running again today after they reported their second quarter earnings report. I’ve spoken about them in the past in regards to having a position and using a technique referred to as channel trading..
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Well so much for that idea now that the company has posted some good results and given some (in my opinion) great guidance. It will be some time before I’ll know what their new trading range will be. On top of all the news that AEM released, there have also been several analysts that raised the target price for Agnico Eagle.
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Yesterday when I saw the price dropping I put in a limit buy order at $52 per share. Unfortunately the low of the day was $52.17. I figured that I’ll just get the shares today at even a lower price, but when I was watching Mad Money with Jim Cramer, he had the CEO of Agnico Eagle on to discuss the report. I knew at that point the shares would go up in the pre-market and continue to do so throughout the day. So I had to put in a limit buy in for 54.00 (hoping that it would be a good bid) before the market opened and was lucky that it did trigger. I think we’ll see some great thing from this company in the next few quarters and I expect to make some great gains with this stock.
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Their two newest mines, Kittila and Lapa have achieved commercial production as well as their other mine Meadowbank and will be operational in the first quarter of 2010. If you haven’t jumped into Agnico Eagle Mines Ltd., do your research and maybe this can be a winner for you and your portfolio.
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Second quarter 2009 highlights include:
- Record Production – record gold production of 119,053 ounces. First gold poured at Pinos Altos in July
- Good Cost Performance – LaRonde, Goldex and Lapa achieve good
minesite cost performance
- Commercial Production At Lapa And Kittila – commercial production
achieved as of May 1 at both mines
- Remaining Two New Gold Mines On Schedule – Pinos Altos and Meadowbank remain on schedule for initial production in third quarter 2009 and first quarter 2010, respectively
- Growth profile bolstered – expected after-tax internal rate of return (“IRR”) of 76% at Goldex expansion and 17% at Pinos Altos expansion at Creston Mascota
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Happy trading.

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Naked Short-Selling Banned

joanne — Tue, 28 Jul 2009 17:02:02 +0000

It has finally been decided that the art of naked short-selling will be banned from now on, which is a good thing since that technique of trading is what caused the demise of Lehman Brothers and many other stocks of the financial sector.
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I’ve never really been a fan of short-selling any stock even though I’ve done a handful of times. Short selling is the idea of betting against the stock, expecting it to go down in value. A trader will borrow and then sell shares of a company, only to buy them back at a lower price to return them back to the entity that they borrowed them from. With naked short-selling, the trader doesn’t worry about borrowing the share before he sells them. At that point he/she has to look around for someone to borrow the shares from. In most cases there aren’t enough shares to go around, causing turmoil and wild swings in the stock price.
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Now the SEC has included a requirement that all brokers must buy or borrow the shares promptly to cover the short sale. The SEC is also considering several other ways to limit short selling. Let’s not forget that it was the SEC that removed the up-tick rules a few years ago.
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The up-tick rule refers to the price of a stock has to move up in price by at least a penny before anyone else can short the same stock. That helps avoid a runaway drop in the stock price.

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Great Gains So Far For This Week

billy — Thu, 16 Jul 2009 20:12:28 +0000

I’ve been busy this week with many things, so keeping an eye on the stock market hasn’t been easy for me. Well this afternoon I’ve had the time to see the progress for the past few days and I’m amazed at the gains that have been made this week by the major indicies.
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I told you in a recent post that I jumped out of basically everything until the markets correct themselves again. We’ve had too much of a run up and I’m skeptical. Looking back on the past few days that I missed, I noticed that there were good opportunities to make money on stocks that I sold and they went on a roller coaster ride afterward.
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The one I want to talk about is Agnico-Eagle Mines Ltd. (NYSE:AEM), a stock that was as high as $62 only five weeks ago. I made the right choice to sell off my position. After it corrected by 10% I bought a small position back. I let it just sit there not bothering to pick up more as it continued to drop. Unknown to me, I wasn’t paying attention to what the stock did this week as it dropped down to below $47.50. If I was aware of the situation, I would have back the truck up so fast to grab shares at that price. That was Monday morning and now the price per share is $55 (as of 3:45pm). A 16% gain in just three trading days.
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In all the times that I’ve traded AEM, I’ve always made money. This would have been great to profit from, but I’m not going to drive myself crazy because I didn’t get into this play. There will always be more opportunities to make money, but if you want to stay sane while trading stocks, you can’t sit there and think of the “what if’s”.
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Agnico Eagle has been trading within a range of $45 to $60 (which is a nice swing gap) this entire calendar year. When the price drops below $50 I buy quite a bit, as it goes above $55 I prepare to sell. This week was a good opportunity to do exactly that and I’m OK with the fact that I missed it.
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Try to keep that in mind as you go through your portfolio.

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Second Quarter Earnings Report Season

billy — Mon, 06 Jul 2009 08:00:43 +0000

It’s that time of year again that comes every three months. That’s right, it’s time for earnings reports. Alcoa (NYSE:AA) is the first company to come out with their results for the second quarter for 2009 (actually it’s just that they are the biggest company to report). Alcoa will release their report after the closing bell on Wednesday July 8th.
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After last week’s debauchery, who really know what to expect. I not expecting anything good from any one company, so I will be watching the companies that I favor to buy on the dips. I’ve again back out of a lot of the positions I had in the past couple of weeks, so I’m in a good position to pick up some of the companies I was in at a lower price. Unfortunately, I’m not all that comfortable with the way the government and the Federal Reserve are handling things right now, that I just might sit out for the next month or so.
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Of course with me doing that, I just may miss out on some great moves, but when in doubt, sit it out.
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On Thursday the DOW lost 223 points. It started off bad in the morning and was pretty much steady all day until the end when the rest of it fell out. The whole week was trading on light volume, which makes it hard to really see which way the markets could have gone. It’s not easy to get a feel for the markets during a holiday week.
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I will wait until tuesday to get a feel for the market tread, but the way the markets have been lately, it’s doesn’t stay one way or the other for long. Take your time and do your research carefully, like you should do all the time.

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