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I have been trading it hard for 2 weeks,and the last run was wednesday later afternoon with a by at 33cents and selling at
37,5 early thursday.
A new trade at 36 to the same 37,5 and with a finishing buy
in late afternoon at 33,5 again resolved in a selling at 35,5 early friday.
I am now in at 33 again though i agree with IA there could be more downside to it,and i wouldn´t hesitate to sell as quickly as possible if that is the indicator on monday.
My wish is that the company recived the final results from drilling ANDthat those are good of course..
Good points nlightn,appreciated..
Regards IzY
That's good dialogue guys on CBS.V. I was looking at this a bit closer, I think you could get this a bit cheaper.
IA.
When you are in a losing streak, your ability to properly assimilate and analyze information starts to become distorted because of the impairment of the confidence factor, which is a by-product of a losing streak.
You have to work very hard to restore that confidence, and cutting back trading helps achieve that goal.
- Bill Lipschutz
It is not enough to simply have the insight to see something apart from the rest of the crowd, you also need to have the courage to act on it and to stay with it.
It's very difficult to be different from the rest of the crowd the majority of the time, which by definition is what you are doing if you are a successful trader.
- Bill Lipschutz
The beginning of a price move is usually hard to trade because you are not sure whether you are right about the direction of the trend.
The end is hard because people start taking profits and the market gets very choppy.
The middle of the move is what I call the easy part.
- Randy McKay
Thanks nlight, my conclusion is based on similar setups of other
stock that u have seen the same pattern in..
I am not an chart specialist 4sure h.e.h.e but as you can see
cbs.v has the same similar setup as glxi and their rises has been
founded on fundamental news.
a strong increase in share price and then a sideway patter
leading to another leg and strong upward move in share price.
Exampel BNC.TO in december we had that same pattern and a
breakout with news.
I appreciate your comments cause i am no specialist in this
area,i trade mostly on fndamental..
Chears IzY
GLXI - this one is on an uptrend. at first i wasn't sure if i liked the company at all,...that is its potential to actually deliver. but putting my emotions and skepticism aside,..this one, at least T/A wise, is going for another leg up.
SUPPORT needs to hold at .31
"Success is the ability to go from one failure to another with no loss of enthusiasm."
--Sir Winston Churchill
Izy,..heres a couple of chart other views,...
Accum/Dist
CMF
Multiple Indicator
Izy,..what brings you to that conclusion ?
HOW DO YOU GUYS LIKE THIS CHART?
I say it´s set up for another run
Regards
IzY
"Patience is not passive; on the contrary, it is active; it is concentrated strength." Edward G. Bulwer-Lytton.
IA.
NVEC,...its not surprising that it took a little bit of a backdown in price today.
with the DOW down 416,...NVEC held up pretty well.
lets see what tomorrow brings.
"If there is nothing to do, then don't do it. Don't just do something because your "gut" tells you to. That can get you in a lot of trouble in this business. Only react to bona fide signals provided by what the chart set up indicators show you. And even at that things could reverse on you. This is a business, your business, if you are haphazard with your business decisions you will soon be out of business."
- Alexander Elder
thanks IA. yea,..it kicked arse today. closed .09 below the days high on very strong volume.
this one is definitely being accumulated again.
will it go for its 52 wk high of $46.35?,...
there is a similar set up that occurred in mid Oct of last year. if it follows that,...its parabolic !
NVEC, great call NL, amazing.
IA.
LPTH touched $ 6.40 today.
IA.
h.a.h.a. good one.
I hope you will contribute poetic statements every week..
IzY
Greenspan's latest comments ...
Greenspan's comment this morning: Conditions are slowly deteriorating and he thinks that the U.S. could slip into a recession later this year.
What's on the radar later this year? For one thing, 1 trillion dollars in sub-prime loans are going to have huge automatic rises in interest rates.
The current estimates is that it will cause a minimum of 20% to go into default.
________________________________________________________________________________________________________
Let's take a look at the Dollar's action this morning.
Our Super Accelerator model shows that the Dollar shifted to a sell signal 8 days ago. The Super Accelerator is
trending down, and the S.T. Accelerator confirmed a down condition when it went below the dark blue horizontal
signal line.
A one year Point & Figure chart on the U.S. Dollar gives us a clearer view of what it happening.
On this chart, it is easier to see the Dollar's down trend and recent break to the downside. As the Dollar drops lower,
U.S. Equities become less attractive to foreign investors.
A recent Treasury Dept. Report showed that net inflows of foreign capital into long-term U.S. securities fell to only $15.6 billion in
December. It was the smallest monthly total in almost five years. On average in 2006, the U.S. needed more than $70 billion a
month in foreign funds to finance our current account deficit. Some are now worried about a new plunge in the Dollar.
http://www.stocktiming.com/Monday-DailyMarketUpdate.htm
NVEC,...$22.35. technically this one is ready for an explosive move,..
and maybe even parabolic.
it's busted through PP in volume on Friday,...Monday will show us if buying has come back in
Resistance/PivotPoint/Support
R4 - 26.15
R3 - 24.98
R2 - 23.82
R1 - 23.08
PP - 21.92
S1 - 21.18
S2 - 20.02
S3 - 19.28
S4 - 18.55
A Handy Little list of ETF's
Standard Index Funds
QQQQ - NDX 100
SPY - SP500
DIA - Dow Jones Industrials
MDY - SP Mid Cap 400
IWM - Russell 2000
Short/Bear Funds (Allows you to short in IRA/401K accounts)
PSQ - Short QQQ Inverse of the NASDAQ-100
SH - Short S&P500 Inverse of the S&P 500
DOG - Short Dow30 Inverse of the DJIA
MYY - Short MidCap400 Inverse of the S&P Mid Cap 400
2x Margin Built In (Allows you to leverage IRA/401K)
QLD - Double the NASDAQ-100
SSO - Double the S&P 500
DDM - Double the DJIA
MVV - Double the S&P MidCap 400
QID - Double the inverse of the NASDAQ-100
SDS - Double the inverse of the S&P 500
DXD - Double the inverse of the DJIA
MZZ - Double the inverse of the S&P MidCap 400
Countries (Allows you to invest in other economies)
EWJ - Japan
EWT - Taiwan
EWH - Hong Kong
EWB - Brazil
EWU - UK
EWW - Mexico
EWM - Malaysia
EWS - Singapore
EWC - Canada
EWY - South Korea
EWP - Spain
EWA - Australia
EWP - Pacific ex. Japan
EWG - Germany
EWI - Italy
EWL - Switzerland
EWQ - France
EWD - Sweden
EWK - Belgium
EWO - Austria
EWN - Netherlands
Stock Market Sector Funds (Sector Baskets)
OIH - Oil Services Sector
XLE - Oil Sector
XLI - Industrial Sector
IGE - Natural Resources Sector
IYR - US Real Estate Sector
XLU - Utility Sector
SMH - Semiconductor Sector
XLF - Financial Sector
RTH - Retail Sector
TTH - Telecom Sector
WMH - Wireless Sector
SWH - Software Sector
XLK - Technology Sector
HHH - Internet Sector
XLB - Materials Sector
XLY - Consumer Discretionary Sector
PPH - Pharmaceuticals Sector
XLV - Health Care Sector
IGN - Networking Sector
BBH - Biotech Sector
Bond Funds
SHY - 1-3 yr treasury bond
IEF - 7-10 yr treasury bond
TLT - 20+ yr treasury bond
LQD - corporate bond
Commodities
GLD - Gold
SLV - Silver
USO - Oil
Currencies
FXA - Rydex CurrencyShares Australian Dollar Trust ETF
FXB - Rydex CurrencyShares British Pound Sterling ETF
FXC - Rydex CurrencyShares Canadian Dollar Trust ETF
FXE - Euro Currency Trust ETF
FXF - Rydex CurrencyShares Swiss Franc Trust ETF
FXM - Mexican Peso Trust ETF
FXS - Rydex CurrencyShares Swedish Krona Trust ETF
generalizations are a cheap way from committing to anything and leaving the door wide open for everything.
so,...when looking at a chart with the various indicators and oscillators you've set up and there is no exact consensus of direction the price will move (which could be considered a generalization)the possibility for anything and everything to occur is wide open.
so,...when a trade does not move in the direction you seek keep in mind that you entered the trade with a generality as your guide. had you entered the trade with a more specific direction the price will most likely move (based on historical price move and he chart set up use) you are starting out with a more ludic trade and most likely will create a profit.
On Pivot/Support/Resistance
by Phil Rosten
Technical analysis books have very little if anything on calculating & using pivot points.
To get a feel for where the most important daily support and resistance levels are located it would be ideal to incorporate the volume behind every trade into a set of equations to calculate the daily volume-weighted average price and standard deviation levels. But because it can be difficult to obtain reliable volume data for real-time, we might be better off concentrating solely on price action.
For years floor traders and market makers have done this by computing a set of pivot point support and resistance levels between which price can be expected to fluctuate. In a way, it is not so important that you know where these support and resistance levels are, but rather, that you know the floor traders or market makers know where they are.
For example, if the floor traders are gunning for money-management stops, guess what price levels they will test? Clearly, the pivot point support and resistance levels are the prices at which many stops are placed because everyone knows where these expected trading limits are.
The central pivot point (CPP) is the equilibrium point around which trading is expected to occur. The calculation for tomorrow’s CPP is simply the average of today’s high, low and close. When prices move away from the CPP there are zones of support and resistance that define the expected value area of the market. Because these zones are known, penetration and market moves beyond these support and resistance levels bring new players into the market who give further momentum to the buying or selling pressure.
Where C[1] is yesterday’s closing price, H[1] is yesterday’s high and L[1] is yesterday’s low, the central pivot point for today and its support and resistance levels are defined as:
Central pivot point P = (H[1] + L[1] + C[1]) / 3
First resistance R1 = (2*P) - L[1]
First support S1 = (2*P) - H[1]
Second resistance R2 = P + (R1 - S1)
Second support S2 = P - (R1 - S1)
There are variants that calculate the pivot point a little differently. One method substitutes the yesterday's close with today's open, and another variation averages both yesterdays close and today's open with yesterday's open & close. I have done some rough comparisons with intra-day data, and (at least currently) the original method seems to be more accurate.
Trading for today will usually remain between the first support and resistance levels as the floor traders and market makers make their markets. The second resistance or support levels come into play only upon failure of the first resistance or support levels to contain price.
If either of the first levels is penetrated, off-floor traders are attracted to the market. In this event, the breakout levels reverse their functions and serve as test points for continued trading. In a bullish breakout, the first resistance level now becomes a support level and the second resistance level becomes a new resistance level. In a bearish breakout, the first support level now becomes the resistance level and the second support level is now the new support level.
It is clear that money-management stops placed within the range between the first support and resistance levels have a high probability of being hit. This is most likely the reason why almost all off-the-floor traders believe with absolute certainty that floor traders are gunning for their stops. To come to grips with this, some traders have used the "four-tick rule" by which a money-management stop is placed four ticks below the first support line or four ticks above the first resistance line.
However, in the cat-and-mouse game of trading, if the floor traders know where everyone calculates support and resistance it doesn’t take a giant mental leap to figure out they can pick off all the stops snuggled just outside these ranges as well.
The primary value of these support and resistance levels is that they enable you to know what the floor traders and market makers know. As technical trading tools, they should only be used in conjunction with other technical indicators to improve their efficiency.
In general, I evaluate stocks before the open to determine the recent momentum for the stock. I will consider a trade in that stock if the recent momentum of the stock, the current market momentum are going the same way. I like to catch the stock just after it moves through the pivot point.
In addition to determining where to place stops, I use the pivot/support/resistance to minimize getting into momentum trades at false tops & bottoms. I also use the support resistance levels to estimate what the potential profit will be, often keeping me out of trades with low potential.
Approaching Trading With an Empty Mind
Brett N. Steenbarger, Ph.D.
I recently accompanied my father to a real estate sale in the southern part of Florida. That market for homes and condos had been among the hottest in the country. When we looked at the number of properties on the market at present, however, and the (paltry) number that were selling, we could see that most million-dollar units would have to be priced $200,000 or more below their recent, peak values. Nonetheless, sellers, for the most part, were keeping their asking prices fixed, despite the clear reality that they were generating no traffic and certainly no offers. Quite simply, they were slow to update their perceptions in a changing reality.
Cognitive psychologists emphasize that we see what we want to see: we are all prisoners of the mental maps we create. Once a trader forms an opinion, he or she is more likely to overweight information consistent with this view than information that is contradictory. In one behavioral finance experiment, subjects have the opportunity to offer an item for sale. In one condition, the subjects have won that item in a contest. In the other condition, the subjects price the item for sale, but it hasn’t been given to them. As you might guess, the subjects who owned the item demanded much more money for the item than those who had no ownership. It was the same item: only the fact of ownership made it valuable. So it is with our market opinions: once we own it, we overvalue it.
Other studies suggest that we see only what we expect to see, and thus become blind to new realities -- much like the Florida sellers.
Laurence Gonzales, in his fascinating book "Deep Survival: Who Lives, Who Dies, and Why", describes a research study from Harvard psychologists. They showed people a film of basketball players passing the ball to each other. During the film, a man in a gorilla costume walks into the middle of the action and stays visible on the screen for about five seconds. One group of subjects was asked to count the number of passes among the players; the other group was simply asked to watch the film. Incredibly, 56% of the subjects who counted the passes didn't ever see the gorilla. Of course, everyone asked to simply watch the film noticed the gorilla man on the basketball court.
The point is that the brain is a kind of search engine: a Googler of reality. If we program our search to look for passes among basketball players, that's the output we receive from the brain. What is extraneous to our search (gorillas) is eliminated. When we conduct a broad search, we receive a wider range of outputs. Focused searches work well if we're looking for a specific item, such as lost car keys. They don't work so well when we need to process all of the information needed to survive in an environment of risk and uncertainty.
It is very easy to approach the markets in focused search mode. We develop a hypothesis about the market (bullish or bearish) and we prime ourselves to look for certain chart patterns or indicator readings. In our haste to find what we're looking for, we can miss the gorillas in the market. Afterwards, we might look back on market action and think, "How in the *^#@ could I have missed that??!!"
Gonzales writes, "The practice of Zen teaches that it is impossible to add anything more to a cup that is already full. If you pour in more tea, it simply spills over and is wasted. The same is true of the mind. A closed attitude, an attitude that says, 'I already know', may cause you to miss important information. Zen teaches openness. Survival instructors refer to that quality of openness as 'humility'. In my experience, elite performers, such as high-angle rescue professionals, who risk their lives to save others, have an exceptional balance of boldness and humility..." (p. 91).
Gonzales has provided a concise formula for trading success: boldness and humility. The exemplary trader has the boldness to act with conviction, and the humility to realize that what is apparent may not be all that is there.
Notice how so many of the excellent market bloggers -- Charles Kirk and Trader Mike come readily to mind--track a variety of sectors and indices, examining the market from multiple angles. They're not just looking for the passes on the basketball court; they want to make sure they're not missing any market gorillas.
As I recently emphasized on my research blog, TraderFeed, the dominant themes of the equity markets have changed. Everywhere we look, there is evidence of risk-aversion. Look at which sector funds are growing assets and which are losing them. Look at which sectors have outperformed the market, and which have not. Value is trumping growth, and large caps are outperforming the small and Midcaps. This is no longer 2003 and 2004.
We can fail to update our mental models, like those Florida homeowners, and miss the gorilla in the market, or we can have the humility to accept and work within changing realities. When it comes to the markets, an empty mind goes a long way toward ensuring a full pocketbook.
Accepting the Obvious
Brett N. Steenbarger, Ph.D.
This past week, I received an email with an excellent question that has bedeviled me in my own work with traders: Why do traders fight breakout, trending moves when they are so obvious? Time and again, I will see traders refuse to enter a market that is breaking lower because “I don’t want to sell the lows”. Worse still, traders will hold onto positions against the trend because “It’s going to come back” or “The market is being manipulated.”
Let’s get down to basics:
Volume tells you where traders and investors are accepting value at a given point in time. If the market has been trading within a narrow range and then breaks above that range on high volume, it means that the market is accepting value at higher levels. If you were attending an auction for an artwork that you own and large numbers of bidders kept offering higher prices for the painting, you would conclude that the painting has not yet found its ultimate selling value. You surely wouldn’t sell your art piece as soon as the first group of bidders starts to aggressively bid!
The market works on similar auction-based principles (see Mind Over Markets, the excellent book by Jim Dalton and coauthors for a discussion of auction theory in trading and the use of the Market Profile). Each day, we see an auction for such artworks as the S&P, NASDAQ, bonds, etc. The dynamic interplay between buyers and sellers determines value for those markets. It is when we see volume expanding on a directional price move that we realize that the market is out of balance. It will continue to move in its direction until it can attract sufficient buying or selling interest to create a new balance.
Not infrequently, I will ask a trader who missed a breakout move what happened to volume during that period? Very often the response will be “I don’t know”. The trader was so busy focusing on price—and so busy focusing on their own reactions to the movement—that the auction-based meaning of the breakout was lost.
I would argue that this is one incontrovertible law of trading: When something important happens in the market, good traders focus on the market and the meaning of the events. Bad traders focus on themselves and their frustration over missing the events, how they can make up the money they lost, etc. Incredibly, I have seen traders miss entire trending days because they were busy convincing themselves that they had “missed the move” on the initial breakout.
Still, there can be another reason for missing those obvious moves. Let me give three different, but related, examples of "refusing to accept the obvious":
1) A woman comes to counseling complaining of marital problems. Her husband has been staying out at night, not spending time with her. He told her he was working late, but she could not reach him at the office. One time she found someone's belongings in his car--a woman's--and questioned him. He explained that she had forgotten to take them from the car after he dropped her off at home following a late day at the office. When the counselor suggested that perhaps he was having an affair, she expressed anger toward the counselor and insisted that she just needed to "work on the marriage". Several weeks later, the husband moved out and moved in with the new woman.
2) A cancer patient has taken a dramatic turn for the worse, and tests confirm massive spread of the cancer. When the physician raises the issue of hospice care and ways of relieving pain in the final weeks of life, the family members angrily confront him and insist that he pursue "more aggressive treatment" so that he could return home and, eventually, get back to work. Meanwhile, the patient is a virtual skeleton due to weight loss, cannot hold down food, and is visibly suffering.
3) A victim of abuse in childhood insists that her father was caring and minimizes the pain of her childhood, despite clear evidence that she was sexually molested, physically beaten, and frequently humiliated. She insists that she must have done something wrong to upset him, and will not use the term "abuse" to describe what she went through. She undergoes periods of depression when, even now, she reaches out to him, only to be rejected.
In all three cases, the difficulty accepting the obvious is the result of a need to believe something different. It isn't just that the individual is blinded to reality: it's a desire to perceive a different reality. In most cases where traders fail to act on breakout moves--or worse, get run over by them--there is a situation where the trader was actively anticipating a different kind of market. Once this becomes part of their analysis, it becomes their opinion, and their ego gets caught up in it. The term traders use is that they become "married to their opinion".
What I've found is helpful is the active creation of "what-if" scenarios in the market that can be mentally rehearsed in a vivid way. If we are range bound, what if we break above the range with expanded volume? What if the small and midcap sectors break above their range, even as my market stays range bound? What if we probe the top of the range and volume dries up? Such what-if scenarios actively prevent the trader from getting caught up in assumptions that become opinions that become marriage partners. "Plan the trade and trade the plan" is common advice, but good traders always have a Plan B.
Finally, let’s consider the reverse scenario: Traders in a range bound market who convince themselves at every move that a breakout is at hand. Once again there is a need to believe, but for a different reason. Too eager for action, bored by the bracketed trade, needing of some P/L juice, they cannot accept that the market has found value and is staying there. Low volumes speak as loudly as high ones to those willing to listen. An ES market that trades only a few hundred contracts per minute is not attracting “other timeframe” participants and will only be jostled back and forth by “locals”. It is very easy to overtrade these markets by anticipating breakouts rather than waiting for evidence of their occurrence. The telltale sign of this problem is the frequent complaint of traders that “this market just won’t trade”. They are busy fighting what the market is doing rather than following the market’s lead.
Ayn Rand was right: Many problems boil down to evasion once our needs and desires conflict with reality.
IONA $ 5.99 support at $ 5.39.
.
IA.
There is no shame in being wrong. The problem is when you keep getting it wrong and do not change.
- Dennis Gartman
“Patience, persistence and perspiration make an unbeatable combination for success.”
– Napoleon Hill, author.
IA.
LPTH $ 5.95 support at $ 5.50 watch the low volume.
.
IA.
STKR touched $ 1.90 today.
IA.
SXT $ 25.60.
IA.
Izy, that's a very good looking chart, if you have any more that you're considering entering, let me know, so I can watch the charts on them.
IA.
I also took position in AFA.V
30,000 at 18cents i am holding that untill we get an update on their Namibia project,wich we will get in a few weeks.
IzY
I will watch closely then.
IA.
Yea hey have a strong force those anonymous brokers.
If it breaks it´s a garantued 15% immediately..
IzY
I will not touch that yet, if it goes past $ 0.60 then I will consider it.
IA.
It was pushed down under 200MA again,and as usuall it was anonymous doint it :)
IzY
IZY, PLE.V good find, breakout is $ 0.60. Thanks for posting this. I'll get ready to take position.
IA.
TodaYs Buy PLE.V 0,59cad... NEWS.
PLEXMAR RESOURCES ANNOUNCES ESCONDIDA IV HAS SAME GEOLOGICAL UNIT AS AURELIAN'S FRUTA DEL NORTE
IzY
BLDP $ 6.65 now.
IA.
Gold through the roof! Here's what's next
Weiss Research
by Larry Edelson
2/22/2007
Larry here, with an urgent update on key markets, starting with gold.
The yellow metal went through the roof yesterday ... chalking up a stunning $23 gain on the day, blasting through its July peak ... and launching a price explosion that could easily send it to new, all-time highs very quickly.
Ditto for oil, which surged $1.22, and is now poised for a major new bull market.
I Told You This Was Coming
And Now It’s Here!
Back in June 2006, I gave Money and Markets readers a market roadmap that highlighted my thoughts on gold, oil and the Dow. And in that issue, I gave you what have turned out to be accurate signposts to follow.
Gold: At the time, gold was trading around $590, and I wrote, “Your downside risk in gold is now lower than it’s been in many months,” and I encouraged readers to buy with both hands.
Sure enough, the lowest subsequent level that gold reached was $571. Then it rallied strongly, closing above my $618.70 level on July 5. Gold is now trading at $685, a gain of about 20% since I put out that roadmap issue.
Oil: I wrote in June: “In the unlikely event that oil closes below $64.05, then I would expect oil to fall as low as $50 a barrel, and we may be in store for more of a correction in oil and gas shares.”
The unlikely did happen, as oil promptly fell below $64.05, and it went as low as $57 in November of last year.
Dow: “If the Dow closes above 11,410, it will be a solid signal that the economy is still humming ... that investors are buying stocks as an inflation hedge ... but the Fed is falling further behind the inflation curve, still committed to easy money.”
The Dow did close above 11,410 on September 1, and it is now pushing above 12,750 for a gain of about 11.7%. The economy has done better than most expected, and as I keep telling you, the Fed is certainly behind the curve in fighting inflation.
My Updated Roadmap and
Important Market Guideposts
If there were ever a time to stay in touch, this is it. Over the next several weeks, important signals will be hit and new trends will emerge. If you don’t want to lose out, you’ll want to stay on top of these markets. Some of the best profit opportunities of the year are ahead of us.
What to Expect From
Gold and Gold Shares
After yesterday’s dramatic surge, a little pullback is always possible. But if that happens, seriously consider buying on the price weakness, because the opportunity will likely be very short-lived.
Reason: Gold’s breakout above $675 tells me that much higher prices are coming swiftly. My new upside targets:
First, $732 an ounce. That’s last year’s high in gold, and I expect it to give way very easily.
Next, is $860 an ounce. That would be a new record high, but it’s absolutely achievable.
From there, the following two important numbers will be $981 and $1,056 per ounce. And I fully expect to see each of these targets hit this year. Here’s why ...
Investors all over the world are waking up to a simple fact — that central bankers are systematically devaluing currencies (with the U.S. dollar leading the way down) ... inflating their economies ... and pumping up money supplies like crazy.
This, on top of all the other problems in the world, is creating huge demand for gold. Meanwhile, there are truly limited supplies of the metal, and mining activity is declining.
You can see why I’m suggesting accumulating gold and gold shares on any weakness. The downside risk is minimal, in my opinion, while the upside is huge.
If you want a diversified stake, you can buy a good gold mutual fund such as the Tocqueville Gold Fund (TGLDX), the DWS Gold and Precious Metals Fund (SCGDX), or U.S. Global’s Gold Shares Fund (USERX).
What to Expect from
Oil and Energy Shares
Look at my chart of oil, and you’ll see that, while the recent correction has been sharp, in no way, shape, or form has the longer-term uptrend been broken!
Here are the points to watch in crude oil prices: $65.10 on the upside and $55.76 on the downside.
If oil closes above $65.10 — and I fully expect that it will — the next stop will be new record highs. In fact, I’d look for prices to go well above $80 a barrel, probably nearer to $100 a barrel. And oil and gas stocks would move up along with crude prices.
Conversely, in the unlikely event that oil closes below $55.76, then I would expect it to fall back to $50 a barrel, and oil and gas shares would probably drop further.
Let me be clear: Anything is possible, but I do not expect the latter scenario. Here’s why ...
China’s economy is hot enough to keep oil and gas prices firm for quite a long time. Just consider the country’s latest economic stats:
* 2006 GDP just revised to up 10.7% growth!
* Fixed asset investment up 24%!
* Total retail sales up 13.7%!
* Urban per-capita income up 10.4%!
And China’s January crude oil imports hit a monthly record 13.7 million tonnes, or about 100 million barrels!
I’ve said this many times before and I’ll say it again — do not underestimate China’s impact on the global economy. For oil, China’s growing influence is going to mean higher prices.
Seriously consider adding to your holdings of oil service companies. They’ve come down nicely in recent weeks, and as you can see from my chart of the Oil Service HOLDRs Trust (OIH), which holds major oil & gas companies, these stocks are still well within the slope of the long-term uptrend.
By the way, the 139.67 level is an important one. Once the OIH closes above that number on a weekly basis, oil stocks will likely skyrocket to new highs. For my latest recommendations, see my Real Wealth Report.
What to Expect from
The Stock Market
A lot of attention has been paid to the Dow Jones Industrial Average lately. Here are two important numbers you need to watch for: 13,000 on the upside and 12,242 on the downside.
The 13,000 level represents stiff psychological resistance, a point at which investors might pause and think before sending the index higher. In fact, this has been the case with most major whole numbers in the Dow.
If the Dow can get through 13,000, it could rally a bit more, perhaps to 13,500.
But I’ll tell you right now: The Dow is defying gravity and several of my indicators continue to tell me that most U.S. stocks are way overbought. Put another way, the stock market is fraught with risk.
Indeed, if the Dow closes below 12,242 at any point, it will be your signal that the recent economic strength is rolling over, that investors think corporate earnings have peaked, and that the weakness in the housing sector is really hitting home. In short, the stock market could get hit very hard.
Despite the seeming strength in the Dow (and other U.S. indexes like the S&P 500), I maintain my position that this is not the time to be heavily invested in U.S. stock markets.
This is especially true because the U.S. dollar is still very much weak at the knees, and prone to further plunges. As I explain in “How the Dow Is Already Getting Killed”, even if the stock market is rallying, you could still be losing money.
But never forget: There are always parts of the market that buck the overall trend. So you could easily see select sectors surging even as most other stocks plunge.
The prime examples: The gold mining shares and carefully chosen energy and other natural resource stocks I’ve just told you about this morning.
Best wishes,
Larry
About VLNT i have some questions.
What´s th story on this one,what do they do.
Is there any website avalible,and is there any records on how many outstanding shares there is?
IzY
That's what i like to hear!
hey million',
remember GLXI....
nothing but smiles coming from me!
keep an eye on this one the rest of the week, more money coming our way.....bigger money than we've seen.
the "money flow" in the pennies where...
"CSAH IS KING"
Wow. Nice run on that one.
ABHH $ 3.08 support $ 2.99.
.
IA.
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