Stocks Full o' Nuts - Crazy Runners and Bank Makers

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NITE : This is the king MM of the OTCBB. He intimides traders and other MMs use that to their advantage knowing that he scares them. That's why NITE is the shaker on most stock runs; he is the most common ax. NITE could be on the ask all the time, he could be leading a dip scaring sellers to SCHB and TDCM on the bid.

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Investors usually focus on weekly and monthly charts to spot long-term trends and forecast long-term price movements.

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-An individual is categorized by the SEC as a 'Pattern Day Trader' or PDT when they buy and sell one or more securities (a stock for example) in the same trading day at least four times in a five day period.

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Corporate downsizing and the decline of labor unions prompted people to take their destiny into their own hands and spawned the entrepreneurial spirit. Corporations tied salaries to performance with stock options.

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"Markets can remain illogical longer than you or I can remain solvent," according to our good friend, Dr. A. Gary Shilling. Illogic often reigns and markets are enormously inefficient despite what the academics believe.

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Bar charts can also be displayed using the open, high, low and close. The only difference is the addition of the open price, which is displayed as a short horizontal line extending to the left of the bar. Whether or not a bar chart includes the open depends on the data available.

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Bid Price - The highest price that a trader is willing to pay to buy a contract (or share). This is the price that will be received for any market orders to sell a contract.

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A resistance breakout signals that demand (bulls) has gained the upper hand and a support break signals that supply (bears) has won the battle.

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Technical analysis involves learning to read a stock's price and volume chart and timing your decisions properly.

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The individual bars that make up the bar chart are relatively skinny, which allows users the ability to fit more bars before the chart gets cluttered.

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At best: Instruction given to a dealer to buy or sell at the best possible rate that can be obtained.

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Dividends and capital gain are two ways you can make money through the investments. You get the fist one if you purchase blue-chip stock. There is a very little fluctuation in the share price, and the companies are reliable and having steady growth. This kind of investment could be a bit slow but fairy safe. While a capital gain happened by making trade. As a trade in common, all you have to do is selling a stock at a higher price than the purchasing rate. The price of a stock ordinarily would take months or years to move downwards or upwards along with the company performance.

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Dovish: Refers to the tone of language when describing a non-aggressive stance or viewpoint regarding a specific economic event or action. It’s often used when describing the economy or interest rates of a country.
Central bankers are described as "dovish" because they generally favor economic growth and employment over tightening interest rates.
Opposite of Hawkish (hawk).

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As interest rates fall and the economy strengthens, demand for commodities increases and commodity prices rise. Keep in mind that an "inflationary environment" does not mean runaway inflation. It simply means that the inflationary forces are stronger than the deflationary forces.

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Greed Is Your Worst Enemy
There's an old saying on Wall Street that "pigs get slaughtered." This greed in investors causes them to hang on to winning positions too long, trying to get every last tick. This trait can be devastating to returns because the trader is always running the risk of getting whipsawed or blown out of a position.

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Bundesbank: The Central Bank of Germany

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Contrary to this methodology, point & figure charts are based solely on price movement, and do not take time into consideration. There is an x-axis but it does not extend evenly across the chart.

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Paying for research and analysis can be both educational and useful. Some investors may find watching or observing market professionals to be more beneficial than trying to apply newly learned lessons themselves

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Double Bottom: A Double Bottom is a form of chart pattern used in technical analysis. This pattern is characterized by a distinct drop in price, followed by a slight reversal (or recovery) with a second drop occurring soon after to either the same or similar level as the first, before another, significant recovery so that the chart appears to take on the form of the letter 'W'.
The Double Bottom, along with its counterpart, the Double Top, is easily one of the most recognizable chart patterns. While both are reliable reversal patterns, highly indicative of chances in the market, the bullish Double Bottom reflects very strong levels of support and often indicates a strong change of trend.
The double low points are considered to be support levels, with the resistance level measured at the widest point of the 'W' formation. When the rise following the second low breaks the resistance point generally the rise will continue sharply, with these reversal trends garnering more reward following extended downtrends.
It is normally considered that the best entry point on a double bottom formation is around the secondary resistance level, which when broken tends to indicate a the confirmation of the price reversal.

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When supply and demand are equal, prices move sideways as bulls and bears slug it out for control.

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A crucial break of support and resistance points must be located to get the best result.

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Commodity Channel Index: The Commodity Channel Index is a tool developed by Donald Lambert to measure the point at which cyclical price reversals for a given asset can be expected. One of the fundamental assumptions behind the CCI is that price trends reverse at regular intervals within an asset, allowing investors to take the appropriate action when the CCI indicates that one of those cyclical reversals is imminent.
The CCI is calculated first by averaging the high, low and closing prices into a measure called the True Price, or TP. A 20-period moving average of the TP becomes the Simple Moving Average of the True Price, or SMATP. A standard deviation of the difference between SMATP and TP over twenty periods is also taken. The difference between TP and SMATP is then divided by the product of this standard deviation and a constant value of .015 to produce the CCI.
The constant value of .015 ensures that the majority of CCI values fall between 100 and -100. In the case that the absolute value of CCI exceeds 100, Lambert's theory indicates that the market is approaching one of its cyclical reversals, and that traders should take the appropriate action. The CCI also indicates overbought and oversold levels, which are any levels whose absolute value exceeds 100. If the CCI moves outside of the -100 to 100 range and then returns, either a buy or sell signal is generated, depending on whether the CCI was below -100 (oversold) or above 100 (overbought.)

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The resistance level of the trading range was well marked by three reaction peaks at 47.5. The support level was not as clearly marked, but appeared to be between 40 and 41.

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To maximize your profits, stage your buys, work your orders and try to get the best price over time

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MFI Oversold: This scan searches for stocks that are above $20 per share, trade over 100,000 shares per day and have oversold Money Flow Index (<10). Consider this a starting point for further analysis and due diligence.

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Only enter a trade after the action of the market confirms your opinion and then enter promptly, but continue to watch your trade , these are penny stocks.

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Intermarket Analysis

Introduction

Intermarket analysis is a branch of technical analysis that examines the correlations between four major asset classes: stocks, bonds, commodities and currencies. In his classic book on Intermarket Analysis, John Murphy notes that chartists can use these relationships to identify the stage of the business cycle and improve their forecasting abilities. There are clear relationships between stocks and bonds, bonds and commodities, and commodities and the Dollar. Knowing these relationships can help chartists determine the stage of the investing cycle, select the best sectors and avoid the worst performing sectors. Much of the material for this article comes from John Murphy's book and his postings in the Market Message at Stockcharts.com.

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The hard trade is the right trade: If it is easy to sell, don't; and if it is easy to buy, don't. Do the trade that is hard to do and that which the crowd finds objectionable. Peter Steidelmeyer taught us this twenty five years ago and it holds truer now than then.

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The Chaikin Money Flow measures buying and selling pressure for a given period of time. A move into positive readings indicates buying pressure, while a move into negative readings indicates selling pressure. Traders and analysts can use the Chaikin Money Flow to confirm price action of the stock. Positive CMF would confirm an uptrend and a negative CMF the opposite.

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Breakaway gaps are the exciting ones. They occur when the price action is breaking out of their trading range or congestion area. To understand gaps, one has to understand the nature of congestion areas in the market. A congestion area is just a price range in which the market has traded for some period of time, usually a few weeks or so. The area near the top of the congestion area is usually resistance when approached from below. Likewise, the area near the bottom of the congestion area is support when approached from above. To break out of these areas requires market enthusiasm and, either, many more buyers than sellers for upside breakouts or more sellers than buyers for downside breakouts.

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Always do a post-analysis of your stock market trades so that you can learn from your successes and mistakes.

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For RSI values, Taking the prior value plus the current value is a smoothing technique similar to that used in exponential moving average calculation. This also means that RSI values become more accurate as the calculation period extends. SharpCharts uses at least 250 data points prior to the starting date of any chart (assuming that much data exists) when calculating its RSI values. To exactly replicate our RSI numbers, a formula will need at least 250 data points.

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Plan Every Trade. Trading blind is senseless. Know exactly what you will do if a stock goes up or down BEFORE you put money on the table.

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Conclusions: Even though many different charting techniques are available, one method is not necessarily better than the other. The data may be the same, but each method will provide its own unique interpretation, with its own benefits and drawbacks. A breakout on the point & figure chart may not occur in unison with a breakout in a candlestick chart. Signals that are available on candlestick charts may not appear on bar charts. How the security's price is displayed, be it a bar chart or candlestick chart, with an arithmetic scale or semi-log scale, is not the most important aspect. After all, the data is the same and price action is price action. When all is said and done, it is the analysis of the price action that separates successful technicians from not-so-successful technicians. The choice of which charting method to use will depend on personal preferences and trading or investing styles. Once you have chosen a particular charting methodology, it is probably best to stick with it and learn how best to read the signals. Switching back and forth may cause confusion and undermine the focus of your analysis. Faulty analysis is rarely caused by the chart. Before blaming your charting method for missing a signal, first look at your analysis.

The keys to successful chart analysis are dedication, focus, and consistency:

Dedication: Learn the basics of chart analysis, apply your knowledge on a regular basis, and continue your development.
Focus: Limit the number of charts, indicators and methods you use. Learn how to use them, and learn how to use them well.
Consistency: Maintain your charts on a regular basis and study them often (daily if possible).

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SCTR Line - The Channellines Technical Rank (SCTR) is a numerical score that ranks a stock within a group of stocks.

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Daily preparation is one of the most important aspects to trading. Knowing what stocks might be in play for the day, and having a "rough" plan on how you will trade those stocks, is the key to successful trading.

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What is the Dow Jones or the DJIA?
The Dow Jones Industrial Average (often referred to as the "Dow") is an averaged number representing the values of 30 U.S. "blue-chip" stocks. The DJIA is the most well-known market indicator in the world and was created in 1896 by Dow Jones & Company, which is actually a publicly-traded company (DJ) on the New York Stock Exchange (NYSE). They produce many important business publications including The Wall Street Journal, Barron's, and several stock indexes.

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Arbitrage:
The simultaneous buying and selling of securities to take advantage of price discrepancies. Arbitrage opportunities usually surface after a takeover offer.

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Never use stop loss orders for active trading. For investors that watch their screens all day and are involved in day trading a stop loss order serves little purpose.

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Business Cycle

The graph below shows the idealized business cycle and the intermarket relationships during a normal inflationary environment. This cycle map is based on one shown in the Intermarket Review by Martin J. Pring (www.pring.com). The business cycle is shown as a sine wave. The first three stages are part of an economic contraction (weakening, bottoming, strengthening). Stage 3 shows the economy in a contraction phase, but strengthening after a bottom. As the sine wave crosses the centerline, the economy moves from contraction to the three phases of economic expansion (strengthening, topping and weakening). Stage 6 shows the economy in an expansion phase, but weakening after a top.

Stage 1 shows the economy contracting and bonds turning up as interest rates decline. Economic weakness favors loose monetary policy and the lowering of interest rates, which is bullish for bonds.

Stage 2 marks a bottom in the economy and the stock market. Even though economic conditions have stopped deteriorating, the economy is still not at an expansion stage or actually growing. However, stocks anticipate an expansion phase by bottoming before the contraction period ends.

Stage 3 shows a vast improvement in economic conditions as the business cycle prepares to move into an expansion phase. Stocks have been rising and commodities now anticipate an expansion phase by turning up.

Stage 4 marks a period of full expansion. Both stocks and commodities are rising, but bonds turn lower because the expansion increases inflationary pressures. Interest rates start moving higher to combat inflationary pressures.

Stage 5 marks a peak in economic growth and the stock market. Even though the expansion continues, the economy grows at a slower pace because rising interest rates and rising commodity prices take their toll. Stocks anticipate a contraction phase by peaking before the expansion actually ends. Commodities remain strong and peak after stocks.

Stage 6 marks a deterioration in the economy as the business cycle prepares to move from an expansion phase to a contraction phase. Stocks have already been moving lower and commodities now turn lower in anticipation of decreased demand from the deteriorating economy.

Keep in mind that this is the ideal business cycle in an inflationary environment. Stocks and bonds advance together in stages 2 and 3. Similarly, both decline in stages 5 and 6. This would not be the case in a deflationary environment, when bonds and stocks would move in opposite directions.

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A sell stop order would allow an investor to avoid further losses or protect a profit if a stock drops below a certain level. The order then gets sent to the exchange and becomes a market order when triggered.

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The drawdown of measuring the ulcer index indicator is the Intel stock that had sustained and strong higher movement. These are simple ulcer index indicator that might be able to help you understand more of the standard business procedure.

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Don't get emotionally involved with your stocks. Follow a set of buying and selling rules, and don't let your emotions change your mind

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Pt2. Weaknesses of Technical Analysis Analyst Bias
Furthering the bias argument is the fact that technical analysis is open to interpretation. Even though there are standards, many times two technicians will look at the same chart and paint two different scenarios or see different patterns. Both will be able to come up with logical support and resistance levels as well as key breaks to justify their position. While this can be frustrating, it should be pointed out that technical analysis is more like an art than a science, somewhat like economics. Is the cup half-empty or half-full? It is in the eye of the beholder.
Too Late

Technical analysis has been criticized for being too late. By the time the trend is identified, a substantial portion of the move has already taken place. After such a large move, the reward to risk ratio is not great. Lateness is a particular criticism of Dow Theory.

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Conclusion

There is an old saying that the market abhors a vacuum and all gaps will be filled. While this may have some merit for common and exhaustion gaps, holding positions waiting for breakout or runaway gaps to be filled can be devastating to your portfolio. Likewise, waiting to get on-board a trend by waiting for prices to fill a gap can cause you to miss the big move. Gaps are a significant technical development in price action and chart analysis, and should not be ignored. Japanese candlestick analysis is filled with patterns that rely on gaps to fulfill their objectives.

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The difference between winners and losers isn’t so much native ability as it is discipline exercised in avoiding mistakes.

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The Chaikin Money Flow line will fluctuate above and below a zero line similar to many other oscillators. Technical analyst can use the CMF indicator to study buying or selling pressure to help them forecast trend direction.

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What is the S&P 500?
The S&P 500 is a stock index published by Standard & Poor's. It measures 500 U.S. stocks that are supposed to be representative of the overall stock market. It was created in 1957.

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There are no refunds on Wall Street, so do your research and focus your trades on damaged stocks rather than companies