National Oilwell Varco (NYSE: NOV) today announced that its Board of Directors has approved an increase in the regular quarterly cash dividend to $0.26 per share of common stock from $0.13 per share of common stock, payable on June 28, 2013 to each stockholder of record on June 14, 2013. The Company has increased its quarterly cash dividend every year since the Company started paying cash dividends.
Pete Miller, Chairman and CEO of National Oilwell Varco, remarked, "This dividend increase reflects the Company's strong financial condition and our confidence in our business going forward. We are pleased that our continued execution and strong cash flow enable us to provide a significantly higher dividend directly to our stockholders. Our business model continues to generate strong operating cash flow that enables us to invest in and execute strategic internal growth and pursue acquisition opportunities to further strengthen our existing businesses."
National Oilwell Varco is a worldwide leader in the design, manufacture and sale of equipment and components used in oil and gas drilling and production operations, the provision of oilfield services, and supply chain integration services to the upstream oil and gas industry.
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Monday, May 20, 2013
National Oilwell Varco Announces Doubling of Dividend NOV
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Sunday, May 19, 2013
Update.....Is it finally time to go long coffee? Mike Seery weighs in!
Late last week one of our trading partners Jim Robinson gave us his take on the sideways trading in coffee right now. Mike Seery jumps in to give us his take with a recap on how coffee traded last week and where he sees it headed. Is it time to go long coffee?
Coffee futures finished down 295 points and had a disappointing week finishing lower by about 800 points still in a real seesaw chart pattern finishing around 137.00 a pound creating a false breakout to the upside last week with a false breakout to the downside a couple weeks ago so were still unable to breakout of this 8 week consolidation.
We are entering the volatile season in coffee as frost season is right around the corner which could propel prices higher if there are any weather problems but this trend is sideways and I’m still recommending traders to avoid this market until a trend develops and I do believe that the three year downturn in prices is nearing an end in my opinion.
One strategy if you’re looking to get involved in coffee and avoid some of the volatility which could be coming is to look at bull call option spreads and that is an option play which limits your risk to what the premium cost and I would go out to the month of September which gives you around 3 months to hold that position before expiration.
Trend: Sideways – Chart structure - excellent
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Coffee futures finished down 295 points and had a disappointing week finishing lower by about 800 points still in a real seesaw chart pattern finishing around 137.00 a pound creating a false breakout to the upside last week with a false breakout to the downside a couple weeks ago so were still unable to breakout of this 8 week consolidation.
We are entering the volatile season in coffee as frost season is right around the corner which could propel prices higher if there are any weather problems but this trend is sideways and I’m still recommending traders to avoid this market until a trend develops and I do believe that the three year downturn in prices is nearing an end in my opinion.
One strategy if you’re looking to get involved in coffee and avoid some of the volatility which could be coming is to look at bull call option spreads and that is an option play which limits your risk to what the premium cost and I would go out to the month of September which gives you around 3 months to hold that position before expiration.
Trend: Sideways – Chart structure - excellent
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Weekly Energy Recap with Mike Seery
The energy futures bucked the trend this week despite the fact that the dollar continues to surge higher but is not putting any pressure on energy prices as July crude oil is still trading above its 20 and 100 day moving average finishing up around $.90 this Friday afternoon at 96.40 a barrel climbing higher for the 3rd consecutive day following the S&P 500 to the upside.
I’ve been advising traders to sit on the sideline in this market because there is no chart structure and I guess the trend might be to the upside but at this point I don’t believe there’s a solid trend to sink your teeth in with major resistance at 98 – 100 which could be tested next week. This market is showing incredible strength in my opinion due to the fact that gold is falling out of bed with many other commodities but even with record supplies here in the United States prices still continue to hang near the top and of the trading range.
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Heating oil futures for the June contract are trading above their 20 day moving average but below their 100 day moving average trading right at 4 week highs up around 300 points the trading week looking to breakout to the upside with major resistance at 2.95 as crude oil is propping up all of the products.
Unleaded gasoline for the June contract is trading above its 20 day moving average but still below its 100 day moving average hitting a 5 week high today as I’ve stated many previous blogs I believe a triple bottom may have occurred in unleaded gas prices and I think were headed higher as demand season for gas starts Memorial Day weekend.
The chart structure in heating oil and in unleaded gasoline is much better than it is in crude oil so focus on the products at this time especially unleaded gas to the upside as prices here in Chicago are flirting around 4.75 a gallon because the fact that we have extremely high taxes and a special summer blend so there is a chance that we could see prices head higher at the pump the summer.
Trend: Higher – Chart structure excellant
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I’ve been advising traders to sit on the sideline in this market because there is no chart structure and I guess the trend might be to the upside but at this point I don’t believe there’s a solid trend to sink your teeth in with major resistance at 98 – 100 which could be tested next week. This market is showing incredible strength in my opinion due to the fact that gold is falling out of bed with many other commodities but even with record supplies here in the United States prices still continue to hang near the top and of the trading range.
Get started trading commodities today.....Here's your Free trading videos!
Heating oil futures for the June contract are trading above their 20 day moving average but below their 100 day moving average trading right at 4 week highs up around 300 points the trading week looking to breakout to the upside with major resistance at 2.95 as crude oil is propping up all of the products.
Unleaded gasoline for the June contract is trading above its 20 day moving average but still below its 100 day moving average hitting a 5 week high today as I’ve stated many previous blogs I believe a triple bottom may have occurred in unleaded gas prices and I think were headed higher as demand season for gas starts Memorial Day weekend.
The chart structure in heating oil and in unleaded gasoline is much better than it is in crude oil so focus on the products at this time especially unleaded gas to the upside as prices here in Chicago are flirting around 4.75 a gallon because the fact that we have extremely high taxes and a special summer blend so there is a chance that we could see prices head higher at the pump the summer.
Trend: Higher – Chart structure excellant
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Friday, May 17, 2013
Is it finally time to go long coffee?
If you have been following us you know we have been adding to our long coffee position using ticker "JO". Are you on board or do you see coffee going lower. Coffee bears have gained back some momentum the last couple of days. Today we've asked our friend Jim Robinson at INO.com to provide his expert analysis of the coffee trade to our readers. Each week he'll be be analyzing a different chart for us using our Trade Triangles and his experience.....
Coffee could be turning bullish, so this week let's take a look at the Coffee Chart. With Futures we use the weekly MarketClub Trade Triangle for trend, and the daily MarketClub Trade Triangle for timing.
* Coffee put in a weekly green Trade Triangle on what looks to be the breakout to the upside of the base.
* Coffee put in a daily red Trade Triangle on what looks to be a test of the base.
* If Coffee trades higher and puts in a green daily Trade Triangle odds would be with bulls.
The MACD made a bullish momentum divergence at the lows and is currently on a buy signal, which supports the bullish case for Coffee as of right now. If Coffee were to continue lower from here and puts in a red weekly MarketClub Trade Triangle, then odds would not be with the bullish case for Coffee any more.
So even though it looks to be a big bullish opportunity for Coffee, we'll just have to sit back and let the market tell us what to do next. So this looks to be a great Chart to Watch right now, as exciting things could be happening on the upside in Coffee soon.
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Coffee could be turning bullish, so this week let's take a look at the Coffee Chart. With Futures we use the weekly MarketClub Trade Triangle for trend, and the daily MarketClub Trade Triangle for timing.
* Coffee put in a weekly green Trade Triangle on what looks to be the breakout to the upside of the base.
* Coffee put in a daily red Trade Triangle on what looks to be a test of the base.
* If Coffee trades higher and puts in a green daily Trade Triangle odds would be with bulls.
The MACD made a bullish momentum divergence at the lows and is currently on a buy signal, which supports the bullish case for Coffee as of right now. If Coffee were to continue lower from here and puts in a red weekly MarketClub Trade Triangle, then odds would not be with the bullish case for Coffee any more.
So even though it looks to be a big bullish opportunity for Coffee, we'll just have to sit back and let the market tell us what to do next. So this looks to be a great Chart to Watch right now, as exciting things could be happening on the upside in Coffee soon.
Just click here to get a FREE trial of the Trade Triangle Technology that we are using!
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Monday, May 13, 2013
How to Spot & Time Stock Market Tops
Since the middle of April everyone and including their grandmother seems to have been building a short position in the equities market and we know picking tops or bottoms fighting the major underlying trend is risky business but most individuals cannot resist.
The rush one gets trying to pick a major top or bottom is flat out exciting and that is what makes it so darn addicting and irresistible. If you have ever nailed a market top or bottom then you know just how much money can be made. That one big win naturally draws you back to keep doing it much like how a casino works. The chemicals released in the brain during these extremely exciting times are strong enough that even the most focused traders fall victim to breaking rules and trying these type of bets/trades.
So if are going to try to pick a top you better be sure the charts and odds are leaning in your favor as much as possible before starting to build a position.
Below are a few charts with my analysis and thoughts overlaid showing you some of the things I look at when thinking about a counter trend trade like picking a top within a bull market.
Utility Stocks vs SP500 Index Daily Performance Chart:
The SPY and XLU performance chart below clearly shows how the majority of traders move out of the slow moving defensive stocks (utilities – XLU) and starts to put their money into more risky stocks. This helps boost the broad market. I see the same thing in bonds and gold this month which is a sign that a market top is nearing.
That being said when a market tops it is generally a process which takes time. Most traders think tops area one day event but most of the times it takes weeks to unfold as the upward momentum slows and the big smart money players slowly hand off their long positions to the greedy emotion drove traders.
Look at the chart below and notice the first red box during September and October. As you can see it took nearly 6 weeks for that top to form before actually falling off. That same thing could easily happen again this time, though I do feel it will be more violent this time around.
SPY ETF Trading Chart Shows Instability and Resistance:
Using simple trend line analysis we see the equities market is trading at resistance and sideways or lower prices are more likely in the next week or two.
Stocks Trading Above 150 Day Moving Average Chart:
This chart because it’s based on a very long term moving average (150sma) is a slow mover and does not work well for timing traded. But with that said it does clearly warn you when stocks are getting a little overpriced and sellers could start at any time.
General rule is not to invest money on the long side when this chart is above the 75% level. Rather wait for a pullback below it.
Stocks Trading Above 20 Day Moving Average Chart:
This chart is based on the 20 day moving average which moves quickly. Because it reacts quicker to recent price action it can be a great help in timing an entry point for a market top or bottom. It does not pin point the day/top it does give you a one or two week window of when price should start to correct.
How to Spot and Time Stock Market Tops Conclusion:
As we all know or will soon find out, trading is one of the toughest businesses or and one of the most expensive hobbies that one will try to master. Hence the 95-99% failure rate of individuals who try to understand how the market functions, position management, how to control their own emotions and to create/follow a winning strategy.
With over 8000 public traded stocks, exchange traded funds, options, bonds, commodities, futures, forex, currencies etc… to pick from its easy to get overwhelmed and just start doing more or less random trades without a proven, documented rule based strategy. This type of trading results in frustration, loss of money and the eventual closure of a trading account. During this process most individuals will also lose friends, family and in many cased self-confidence.
So the next time you think about betting against the trend to pick a top or a bottom you better make darn sure you have waited well beyond the first day you feel like the market is topping out. Stocks trading over the 150 and 20 day moving averages should be in the upper reversal zones and money should be flowing out of bonds and other safe haven/defensive stocks to fuel the last rally/surge higher in the broad market.
Also I would like to note that I do follow the index futures and volume very closely on both the intraday and daily charts. This is where the big money does a lot of trading. Knowing when futures contracts are being sold or bought with heavy volume is very important data in helping time tops and bottoms more accurately. And the more experience you have in trading also plays a large part in your success in trading tops and bottoms.
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The rush one gets trying to pick a major top or bottom is flat out exciting and that is what makes it so darn addicting and irresistible. If you have ever nailed a market top or bottom then you know just how much money can be made. That one big win naturally draws you back to keep doing it much like how a casino works. The chemicals released in the brain during these extremely exciting times are strong enough that even the most focused traders fall victim to breaking rules and trying these type of bets/trades.
So if are going to try to pick a top you better be sure the charts and odds are leaning in your favor as much as possible before starting to build a position.
Below are a few charts with my analysis and thoughts overlaid showing you some of the things I look at when thinking about a counter trend trade like picking a top within a bull market.
Utility Stocks vs SP500 Index Daily Performance Chart:
The SPY and XLU performance chart below clearly shows how the majority of traders move out of the slow moving defensive stocks (utilities – XLU) and starts to put their money into more risky stocks. This helps boost the broad market. I see the same thing in bonds and gold this month which is a sign that a market top is nearing.
That being said when a market tops it is generally a process which takes time. Most traders think tops area one day event but most of the times it takes weeks to unfold as the upward momentum slows and the big smart money players slowly hand off their long positions to the greedy emotion drove traders.
Look at the chart below and notice the first red box during September and October. As you can see it took nearly 6 weeks for that top to form before actually falling off. That same thing could easily happen again this time, though I do feel it will be more violent this time around.
SPY ETF Trading Chart Shows Instability and Resistance:
Using simple trend line analysis we see the equities market is trading at resistance and sideways or lower prices are more likely in the next week or two.
Stocks Trading Above 150 Day Moving Average Chart:
This chart because it’s based on a very long term moving average (150sma) is a slow mover and does not work well for timing traded. But with that said it does clearly warn you when stocks are getting a little overpriced and sellers could start at any time.
General rule is not to invest money on the long side when this chart is above the 75% level. Rather wait for a pullback below it.
Stocks Trading Above 20 Day Moving Average Chart:
This chart is based on the 20 day moving average which moves quickly. Because it reacts quicker to recent price action it can be a great help in timing an entry point for a market top or bottom. It does not pin point the day/top it does give you a one or two week window of when price should start to correct.
How to Spot and Time Stock Market Tops Conclusion:
As we all know or will soon find out, trading is one of the toughest businesses or and one of the most expensive hobbies that one will try to master. Hence the 95-99% failure rate of individuals who try to understand how the market functions, position management, how to control their own emotions and to create/follow a winning strategy.
With over 8000 public traded stocks, exchange traded funds, options, bonds, commodities, futures, forex, currencies etc… to pick from its easy to get overwhelmed and just start doing more or less random trades without a proven, documented rule based strategy. This type of trading results in frustration, loss of money and the eventual closure of a trading account. During this process most individuals will also lose friends, family and in many cased self-confidence.
So the next time you think about betting against the trend to pick a top or a bottom you better make darn sure you have waited well beyond the first day you feel like the market is topping out. Stocks trading over the 150 and 20 day moving averages should be in the upper reversal zones and money should be flowing out of bonds and other safe haven/defensive stocks to fuel the last rally/surge higher in the broad market.
Also I would like to note that I do follow the index futures and volume very closely on both the intraday and daily charts. This is where the big money does a lot of trading. Knowing when futures contracts are being sold or bought with heavy volume is very important data in helping time tops and bottoms more accurately. And the more experience you have in trading also plays a large part in your success in trading tops and bottoms.
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America’s Addiction to Foreign Uranium
America’s Addiction to Foreign Uranium
Posted courtesy of our trading partners at Casey Research.........
What most Americans don't realize is that dependence on foreign oil isn't the main obstacle to US energy autonomy. If you think America's energy supply issues begin and end with the Middle East, think again. One of the most critical sources of foreign energy is due to dry up this year, and the results could mean spiking electricity prices across the country.In 2011, the US used 4,128 billion kilowatt hours (kWh) of electricity. Nuclear power provided 790.2 billion kWh, or 19% of the total electrical output in the US. Few people know that one in five US households is powered by nuclear energy, and that the price of that nuclear power has been artificially stabilized. Unfortunately for us, the vast majority of the fuel used for powering our homes must be imported.
In the chart below, you see where most of our uranium comes from:
By December 2012, "Megatons to Megawatts" had produced 13,603 metric tons of LEU for US consumption and provided the fuel for nearly half of the US electricity generated from nuclear power.
In December 2013, that agreement expires, and Russia will be free to put its uranium out on the open market and demand higher prices. With 17 nuclear reactors in China and 20 in India – not to mention Japan, France, Germany, and others all vying for nuclear fuel – competitive bids are poised to drive prices higher, and early investors stand to make spectacular gains.
If this information is news to you, you are not alone. While the mainstream media focus on the US's "Middle Eastern energy dependence," the real story remains unnoticed. That's why Casey Research invited the field's top experts – including former US Secretary of Energy Spencer Abraham and Chairman Emeritus of the UK Atomic Energy Authority Lady Barbara Judge – for a frank discussion of what we think is America's greatest energy challenge.
Join us on Tuesday, May 21 at 2 p.m. EDT for the premiere of The Myth of American Energy Independence: Is Nuclear the Ultimate Contrarian Investment? to learn how the end of "Megatons to "Megawatts" will affect the US energy sector and how you can position yourself for outsized profits. Attendance is free – click here to register.
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Sunday, May 12, 2013
Will Crude Oil Futures Stop the Fed’s QE Program?
From guest blogger J.W. Jones at Options Trading Signals.......
The sell side analysts and economists are reminding retail investors that risk assets in the United States have been on quite a tear to the upside recently. A correction now lasts a matter of days, if not hours before the bulls push equity prices even higher.
The Federal Reserve is winning the reflation war using cheap money and massive levels of liquidity to help drive risk assets higher and interest rates artificially lower. Unfortunately for domestic investors searching for yield, they find that they are forced to incur higher levels of risk in order to satisfy their growth and income needs. There are significant risks associated with higher than average fixed income returns and the cost will be felt should we see any correction in the future.
However, the Federal Reserve has a history that is littered with dismal results. The purchasing power of the U.S. Dollar has been reduced by more than 90% since the Fed’s inception in late December of 1913. Since that time, the Federal Reserve has stolen more “real” wealth from the American people than any other institution in the history of mankind.
The Federal Reserve has two primary functions. One function is to maintain price stability or in other words to moderate inflation. Clearly over the past 100 years their inflation track record has been horrific. However, the Fed’s recent track record regarding the value of the U.S. Dollar Index has been dismal the past 15 years as shown below.
As can be seen clearly above in the Dollar Index Futures monthly chart, at present levels the Dollar’s overall value has diminished well over 31% since late 2001. I would also draw readers’ attention to the selloff that occurred from late 2005 until the early part of 2008. The selloff during that period of time is important to reinforce my next consideration.
Recently the flow of liquidity has primarily been seen in record low interest rates and a surging U.S. equity market. Nearly every day the Dow Jones Industrial Average or the S&P 500 Indexes make a new all-time high. The question that I would like to posit for readers is how long will it be before the so-called smart money starts looking at the attractiveness of commodities relative to equities?
If the Federal Reserve continues to print money at this pace, what will ultimately stop them dead in their tracks? The short answer is energy prices. The easiest way to stop the Fed’s printing press is to see a massive spike in energy prices. While we often hear that history does not repeat but it often rhymes, consider the price action in oil futures during the same 2006 – 2008 selloff in the U.S. Dollar Index.
It is readily apparent that once oil futures were able to push above the $78 / barrel highs in mid-2006, prices exploded while the U.S. Dollar came under strong selling pressure. The timing could not be more impeccable for the explosive nature in the move higher in oil.
Furthermore, if we move forward to present day price action in oil futures we have a large triangle pattern on the long-term charts. The pattern offers the inflation versus deflation argument that so many economists and strategists are plagued by presently in their analysis.
My suggestion is that watching the price of oil futures is likely going to tell us the intermediate expectation by the market of what lies ahead in the inflation versus deflation debate. The movement of oil futures prices in the intermediate term is likely to be based on which direction the triangle pattern ultimately breaks.
What is obvious about this pattern is that a move that could hurdle $100 / barrel will open up a strong move toward $112 – $120 / barrel. If we were to see a move higher in oil futures that could push above the $120 / barrel price level set back in early 2011 a fierce rally in oil futures could play out.
A strong rally in oil futures will ultimately put the final nail in the coffin for U.S. equity markets and the U.S. economy. Gasoline prices would obviously rocket higher and the U.S. economy would quickly be brought to its knees. The Federal Reserve would be forced to either print more money and run the risk of higher oil prices, or do nothing and run the risk that the equity selloff could intensify.
I want to be clear that I am not calling for a rally in oil futures. Price action could go either way depending on market conditions, but the real question is regardless of which way price breaks in the future, how does it help equity markets? Those evil oil speculators run down by politicians seeking air time on television and radio could be the final straw for Ben Bernanke and the Federal Reserve.
Whether the future is full of inflation, deflation, or stagflation I am confident that energy prices will play a critical role in price discovery for not just oil and oil distillates, but for the overall domestic economy.
If the Fed does not show constraint at the appropriate time, oil and other commodity prices are likely to remind Chairman Bernanke that the Federal Reserve’s future track record is likely to be as dire as its historical performance.
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The sell side analysts and economists are reminding retail investors that risk assets in the United States have been on quite a tear to the upside recently. A correction now lasts a matter of days, if not hours before the bulls push equity prices even higher.
The Federal Reserve is winning the reflation war using cheap money and massive levels of liquidity to help drive risk assets higher and interest rates artificially lower. Unfortunately for domestic investors searching for yield, they find that they are forced to incur higher levels of risk in order to satisfy their growth and income needs. There are significant risks associated with higher than average fixed income returns and the cost will be felt should we see any correction in the future.
However, the Federal Reserve has a history that is littered with dismal results. The purchasing power of the U.S. Dollar has been reduced by more than 90% since the Fed’s inception in late December of 1913. Since that time, the Federal Reserve has stolen more “real” wealth from the American people than any other institution in the history of mankind.
The Federal Reserve has two primary functions. One function is to maintain price stability or in other words to moderate inflation. Clearly over the past 100 years their inflation track record has been horrific. However, the Fed’s recent track record regarding the value of the U.S. Dollar Index has been dismal the past 15 years as shown below.
As can be seen clearly above in the Dollar Index Futures monthly chart, at present levels the Dollar’s overall value has diminished well over 31% since late 2001. I would also draw readers’ attention to the selloff that occurred from late 2005 until the early part of 2008. The selloff during that period of time is important to reinforce my next consideration.
Recently the flow of liquidity has primarily been seen in record low interest rates and a surging U.S. equity market. Nearly every day the Dow Jones Industrial Average or the S&P 500 Indexes make a new all-time high. The question that I would like to posit for readers is how long will it be before the so-called smart money starts looking at the attractiveness of commodities relative to equities?
If the Federal Reserve continues to print money at this pace, what will ultimately stop them dead in their tracks? The short answer is energy prices. The easiest way to stop the Fed’s printing press is to see a massive spike in energy prices. While we often hear that history does not repeat but it often rhymes, consider the price action in oil futures during the same 2006 – 2008 selloff in the U.S. Dollar Index.
It is readily apparent that once oil futures were able to push above the $78 / barrel highs in mid-2006, prices exploded while the U.S. Dollar came under strong selling pressure. The timing could not be more impeccable for the explosive nature in the move higher in oil.
Furthermore, if we move forward to present day price action in oil futures we have a large triangle pattern on the long-term charts. The pattern offers the inflation versus deflation argument that so many economists and strategists are plagued by presently in their analysis.
My suggestion is that watching the price of oil futures is likely going to tell us the intermediate expectation by the market of what lies ahead in the inflation versus deflation debate. The movement of oil futures prices in the intermediate term is likely to be based on which direction the triangle pattern ultimately breaks.
What is obvious about this pattern is that a move that could hurdle $100 / barrel will open up a strong move toward $112 – $120 / barrel. If we were to see a move higher in oil futures that could push above the $120 / barrel price level set back in early 2011 a fierce rally in oil futures could play out.
A strong rally in oil futures will ultimately put the final nail in the coffin for U.S. equity markets and the U.S. economy. Gasoline prices would obviously rocket higher and the U.S. economy would quickly be brought to its knees. The Federal Reserve would be forced to either print more money and run the risk of higher oil prices, or do nothing and run the risk that the equity selloff could intensify.
I want to be clear that I am not calling for a rally in oil futures. Price action could go either way depending on market conditions, but the real question is regardless of which way price breaks in the future, how does it help equity markets? Those evil oil speculators run down by politicians seeking air time on television and radio could be the final straw for Ben Bernanke and the Federal Reserve.
Whether the future is full of inflation, deflation, or stagflation I am confident that energy prices will play a critical role in price discovery for not just oil and oil distillates, but for the overall domestic economy.
If the Fed does not show constraint at the appropriate time, oil and other commodity prices are likely to remind Chairman Bernanke that the Federal Reserve’s future track record is likely to be as dire as its historical performance.
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Saturday, May 11, 2013
Correction near but Bull Market has LONG waves to Go!
Are you using Elliot Wave theory in your trading? Today David Banister of Market Trend Forecast is laying out the Elliot formations in detail. Do yourself a favor and take a few minutes to make sure you are looking at this market through his eyes. Can any of us call the pull back exactly and reliably? No, of course not. But we should all be taking this into consideration.
The SP 500 has been on a tear as we all know especially since the SP 500 bottomed at 1343 several months ago. My work centers around forecasting using Elliott Wave Theory along with other technical indicators. This helps with projecting the short, intermediate, and longer term paths in the stock market and also precious metals. This larger picture Bull Cycle started in March of 2009 interestingly after an exact 61.8% Fibonacci retracement of the entire move from 1974 to 2000 lows to highs. At 666, we had completed a major cycle bottom with about 9 years of movement to retrace 26 years of overall bull cycle. That was a major set of 3 waves (Corrective patterns in Elliott Wave Theory) from the 2000 highs to 2002-3 lows, then 2007 highs to 2009 lows. Once that completed its work, we were free to have a huge new bull market cycle off extreme sentiment and generational lows.
It’s important to understand where we were at in March of 2009 just as much as it is today with the market at all time highs. Is this the time to bail out of stocks or do we have a lot more upside yet to go? Our short answer is there is quite a bit more upside left in the indexes, but there are multiple patterns that must take place along the way. We will try to lay those out for you here as best we can.
Elliott Wave theory in general calls for 5 full wave cycles in a Bull pattern, with 1, 3, and 5 bullish and 2 and 4 corrective. We are currently in what is often the most bullish of all the patterns, a 3rd of a 3rd of a 3rd. In English, we are in Primary wave 3 of this bull cycle which will be 5 total primary waves. We are in Major wave 3 of that Primary 3, and in the Intermediate wave 3 of Major wave 3. That is why the market continues its relentless climb. This primary wave 3 still has lots of work to do because Major wave 3 still has a 4th wave down and a 5th wave up to finish, then we need a major 4, then a major 5.
That will complete primary wave 3. This will then be followed by a Primary wave 4 cycle correction that probably lasts several months, and then a Primary wave 5 cycle to finish this part of the bull market from March 2009 generational lows… and all of that work is going to take time. Once that entire process from March 2009 has completed, then we should see a much deeper and uglier correction pattern, but we think that is at least 12 months or more away.
What everyone wants to know then is where are we at right now and what are some likely areas for pivot highs and lows ahead? We should complete this 3rd of a 3rd of a 3rd here shortly and have a wave 4 correction working off what will likely be almost 300 points of upside from SP 500 1343. We could see as much as 90-120 points of correction in the major index once this wave completes. Loosely we see 1528-1534 as a possible top and if not then maybe another 30 or so points above that maximum into early June. This should then trigger that 90-120 point correction, and then be followed by yet another run to highs.
We could go on but then we will lose our readers here for sure, and as it is… this is all projections and postulations, so it’s best to keep the forecast to the next many weeks or few months. Below is a chart we have put together showing the structure of Major wave 3 of Primary 3 since the 1343 lows. Once that Major wave 3 tops out (see the blue 3) then we will have Major 4, then Major 5 to complete Primary wave 3 since the 1074 SP 500 lows. Whew!
Join us to get daily updates on nearer term directions of the SP 500 and Gold
The SP 500 has been on a tear as we all know especially since the SP 500 bottomed at 1343 several months ago. My work centers around forecasting using Elliott Wave Theory along with other technical indicators. This helps with projecting the short, intermediate, and longer term paths in the stock market and also precious metals. This larger picture Bull Cycle started in March of 2009 interestingly after an exact 61.8% Fibonacci retracement of the entire move from 1974 to 2000 lows to highs. At 666, we had completed a major cycle bottom with about 9 years of movement to retrace 26 years of overall bull cycle. That was a major set of 3 waves (Corrective patterns in Elliott Wave Theory) from the 2000 highs to 2002-3 lows, then 2007 highs to 2009 lows. Once that completed its work, we were free to have a huge new bull market cycle off extreme sentiment and generational lows.
It’s important to understand where we were at in March of 2009 just as much as it is today with the market at all time highs. Is this the time to bail out of stocks or do we have a lot more upside yet to go? Our short answer is there is quite a bit more upside left in the indexes, but there are multiple patterns that must take place along the way. We will try to lay those out for you here as best we can.
Elliott Wave theory in general calls for 5 full wave cycles in a Bull pattern, with 1, 3, and 5 bullish and 2 and 4 corrective. We are currently in what is often the most bullish of all the patterns, a 3rd of a 3rd of a 3rd. In English, we are in Primary wave 3 of this bull cycle which will be 5 total primary waves. We are in Major wave 3 of that Primary 3, and in the Intermediate wave 3 of Major wave 3. That is why the market continues its relentless climb. This primary wave 3 still has lots of work to do because Major wave 3 still has a 4th wave down and a 5th wave up to finish, then we need a major 4, then a major 5.
That will complete primary wave 3. This will then be followed by a Primary wave 4 cycle correction that probably lasts several months, and then a Primary wave 5 cycle to finish this part of the bull market from March 2009 generational lows… and all of that work is going to take time. Once that entire process from March 2009 has completed, then we should see a much deeper and uglier correction pattern, but we think that is at least 12 months or more away.
What everyone wants to know then is where are we at right now and what are some likely areas for pivot highs and lows ahead? We should complete this 3rd of a 3rd of a 3rd here shortly and have a wave 4 correction working off what will likely be almost 300 points of upside from SP 500 1343. We could see as much as 90-120 points of correction in the major index once this wave completes. Loosely we see 1528-1534 as a possible top and if not then maybe another 30 or so points above that maximum into early June. This should then trigger that 90-120 point correction, and then be followed by yet another run to highs.
We could go on but then we will lose our readers here for sure, and as it is… this is all projections and postulations, so it’s best to keep the forecast to the next many weeks or few months. Below is a chart we have put together showing the structure of Major wave 3 of Primary 3 since the 1343 lows. Once that Major wave 3 tops out (see the blue 3) then we will have Major 4, then Major 5 to complete Primary wave 3 since the 1074 SP 500 lows. Whew!
Join us to get daily updates on nearer term directions of the SP 500 and Gold
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Thursday, May 9, 2013
Top 3 Trading Indicators for Profitable & Simple Trading
Many investors and traders make the same mistakes assuming that one needs a complex trading system to consistently profit from the stock market. On the contrary, some of the top performing strategies are the ones with the least amount of moving parts and are simple. Because their simplicity they can be easily and consistently followed.
The methodologies we use for timing the market, picking stocks and option trades are very simple because we focus mainly on price, volume and momentum. These three indicators are the key to success. When these are used together you are able time your entries and exits during key turning points, clearly define risk and reward levels while maintaining a clear unbiased state of mind which allows one to trade almost emotionless.
As my Trading System Mastery coach taught me, if you do not have a detailed trading plan which a five year old could trade, then you do not have a solid strategy and will have unnecessary losses and emotional stress.
So here are a couple tips to keep things simple and emotionless:
Our recent trade in Infoblox Inc. (BLOX):
This stock was flashing several signals (price, volume and momentum) that a bounce or rally was likely going to happen within a few weeks. This is a good example of a swing trade based purely on our main indicators.
Our Broad Market Outlook: Current stock market prices are starting to warn us that a market correction is near. You can read more about this in detail in our last report “Stocks Preparing for a Pullback, Buy Bas News, Sell the Good”.
We all know the market works with the saying.....
“If the market doesn’t shake you out, it will wait you out”.
How does this work? Simple really, during down trends and just before a market bottom we tend to see capitulation spikes in selling. These scare the last of the long positions out of the market and suck in the greedy shorts after the move has already been made.
During an uptrend which is what we are in now the market makes spike highs designed to scare out the shorts and get greedy long traders to buy more. Once again after the move has already been made and likely near the market top.
If you are the type of trader who always tries to pick tops and bottoms against the current trend then you may like to know this little tip… The largest percent moves typically happen during the last 75% of the trend. What does this mean? It means when you take your position against the trend trying to pick the dead top or bottom you are most likely going to get be caught on the wrong side of the market in a big way.
Most traders I know based on recent emails have been short the market for 1-3 weeks and many keep emailing me that they are adding more shorts each day because they feel the market is going to top. So me being a contrarian by nature in terms of what the masses are doing, if everyone is still holding on to their shorts we likely have not seen the top just yet. Another 1-2% jump from here should be enough to shake them out though.
If you like this article just click here to join our free newsletter to receive more timely trading insight.
The Bible for Commodity Traders....Get our free eBook now!
The methodologies we use for timing the market, picking stocks and option trades are very simple because we focus mainly on price, volume and momentum. These three indicators are the key to success. When these are used together you are able time your entries and exits during key turning points, clearly define risk and reward levels while maintaining a clear unbiased state of mind which allows one to trade almost emotionless.
As my Trading System Mastery coach taught me, if you do not have a detailed trading plan which a five year old could trade, then you do not have a solid strategy and will have unnecessary losses and emotional stress.
So here are a couple tips to keep things simple and emotionless:
Our recent trade in Infoblox Inc. (BLOX):
This stock was flashing several signals (price, volume and momentum) that a bounce or rally was likely going to happen within a few weeks. This is a good example of a swing trade based purely on our main indicators.
Our Broad Market Outlook: Current stock market prices are starting to warn us that a market correction is near. You can read more about this in detail in our last report “Stocks Preparing for a Pullback, Buy Bas News, Sell the Good”.
We all know the market works with the saying.....
“If the market doesn’t shake you out, it will wait you out”.
How does this work? Simple really, during down trends and just before a market bottom we tend to see capitulation spikes in selling. These scare the last of the long positions out of the market and suck in the greedy shorts after the move has already been made.
During an uptrend which is what we are in now the market makes spike highs designed to scare out the shorts and get greedy long traders to buy more. Once again after the move has already been made and likely near the market top.
If you are the type of trader who always tries to pick tops and bottoms against the current trend then you may like to know this little tip… The largest percent moves typically happen during the last 75% of the trend. What does this mean? It means when you take your position against the trend trying to pick the dead top or bottom you are most likely going to get be caught on the wrong side of the market in a big way.
Most traders I know based on recent emails have been short the market for 1-3 weeks and many keep emailing me that they are adding more shorts each day because they feel the market is going to top. So me being a contrarian by nature in terms of what the masses are doing, if everyone is still holding on to their shorts we likely have not seen the top just yet. Another 1-2% jump from here should be enough to shake them out though.
If you like this article just click here to join our free newsletter to receive more timely trading insight.
The Bible for Commodity Traders....Get our free eBook now!
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The Energy Shortage Most Investors Don't Know About
There’s an energy crisis brewing that’s off virtually everyone’s radar. It will be so severe, so disruptive that it will cause a shocking rise in the cost of power around the world.
And at the same time create a contrarian investing opportunity for the history books.
Russia is at the forefront of this budding crisis, which will begin in earnest when the Megatons to Megawatts agreement with the U.S. ends.
That happens in just a few short months, giving you very little time to position yourself......Read the entire Casey Research report and article.
The Bible for Commodity Traders....Get our FREE eBook Today!
And at the same time create a contrarian investing opportunity for the history books.
Russia is at the forefront of this budding crisis, which will begin in earnest when the Megatons to Megawatts agreement with the U.S. ends.
That happens in just a few short months, giving you very little time to position yourself......Read the entire Casey Research report and article.
The Bible for Commodity Traders....Get our FREE eBook Today!
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