Investing Research

Trading The Trend: Keep It Simple

68 Wall Street – those were the days. If you know your history of the US stock market, on May 17, 1792, the stock market as we know it today was initiated with 5 securities traded amongst 24 stockbrokers and merchants. This initial meeting all started under a Buttonwood tree known today as the Buttonwood agreement. Early years of trading didn’t require early morning wake ups. You have to wonder

Weekly Chart Scan: Using Discipline To Find Market Leaders

The story of a leadership stock doesn’t begin or end with a story of its fundamental profile or how it broke out from a constructive base or continuation pattern. The story begins at how the stock acted at key moving averages and / or price support during pullbacks, particularly as the general market is attempting to bottom. If the technical foundation of the price structure is unsound, the probability of

Market Masters: How To Manage An Iron Condor Trade

For many professional option traders, iron condors form the basis of how they generate monthly income. Iron condors are a strategy that allows you to profit from sideways moving stocks, but they can also profit if the stock experiences slightly higher or slightly lower prices over the course of the trade. Where beginners get in to trouble is when a stock makes a big move in either direction shortly after

Why The Latest V-Bottom Rally Is Bearish

It’s difficult to argue against the opinion that the latest “v-bottom” rally in US equities has more force and bullish swagger about it than any market leg higher since at least January 2013. Calling it “bearish” sounds like an absurd contradiction.  But is it possible this superficial show of strength – taken in the context of the decline preceding it – is indicative of a more fragile market underneath the surface:

Evaluating The Small Caps Rally: What’s Next?

For much of 2014 the Russell 2000 (RUT), which represents small caps stocks, has underperformed. This highlighted a move to safer risk assets, such as large cap stocks. But this underperformance may have reached an extreme when the market bottomed in mid-October. Since bottoming on October 15th, the small caps index has been on fire: it’s been up 6 out of the past 8 days, rallying 7.5% off its intraday

30 Year Treasury Bond Study: Is The Bull Market Over?

Turn back the clock to September 2007. In the build up to the Federal Reserve rate meeting that month, very few saw a half point cut coming. What’s interesting about this? While investors were awaiting this key meeting and decision, I presented the PATTERN for institutional clients and said, they are going to do “nothing” or “cut rates.” People thought I was crazy… but I just looked at the chart.

Market Masters: Trade The Chart, Not Your Heart

“Man, I wish I’d gotten out of that trade when price dropped under that support level.” Does this sound familiar? Have you ever let a trade get away from you? Of course you have and so has yours truly. If you’ve ever traded the stock market, there is  a 100% chance you’ve mismanaged a trade and paid dearly for it. Looking back over the last 15 years, I know I’ve made

2 Charts Revisited: The Put Call Ratio And VIX Term Structure

Back on October 7, I wrote this piece that focused on two bearish indicators and I said we could see some near-term weakness in the market. After a quick 4% drop in a week, we bounced and formed a nice looking V-bottom. Check out this chart of the S&P 500 (SPX):   I said at the time that I wanted to see both the CBOE options equity put/call ratio and

Emerging Markets ETFs At Technical Crossroads

Emerging market stocks came alive during the mid-point of 2014 that led to significant relative strength versus domestic equities. However, since topping in September, the Vanguard Emerging Markets ETF (VWO) has pulled back to its 200-day average as it seeks to define the next path forward. VWO is currently sitting at a technical crossroads that includes shuffling near its long-term trend line along with a significant point of support near

Point And Figure: Caution, But SPX UpTrend Still Intact

Recently I posted a piece for trend followers using Point and Figure charts to highlight the strength of the S&P 500 (SPX) over the past two years. And wouldn’t you know it, less than two weeks later we got a double bottom sell signal when the SPX printed 1889.51 So does this mean that investors should go short? For starters, adhering to point and figure guidelines, it is not advisable to initiate a short