Market’s Next Move

When guessing what will happen next, you need look no farther then the trend, and the condition of the market.  So what knowledge can be gleaned from the current situation?

This chart shows the SPY, an etf that tracks the S&P 500 index.  Read the rest of this entry »

Triple Leveraged Arbitrage

This is a long term play you’ve NEVER heard of.  Its not quite arbitrage, but it does have some similarities.  Its similar to an arbitrage strategy in that you have a long position, and a short position on the same underlying.  In other ways its like selling call options dated fairly far out, in that the odds are highly on your side, and it should slowly but relatively safely make money over longer time periods.  Yet the reality is this play is like nothing you’ve ever seen. I call this ETF strategy: Triple Leveraged Arbitrage.

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Time to short financials?

So lets get straight to the point.  The financial industry has been destroyed during this recession.  Going by the XLF, a ETF that focuses on the financial sector, at the prior bottom, the sector was down 83%. Meaning a recovery to previous levels would be a 488% gain.  Since the March bottom, it rallied 110%, and after a small pullback, has dropped to just 85% higher then the march levels.

So what happens next?  After this rollercoaster ride of a sector, what’s likely to happen next?  There are a couple key ways we can predict that, but keep in mind that the point of technical analysis isn’t to be 100% sure of the direction; the idea is to get a good idea of what is most likely to happen next, and capitalize on the opperunities the market gives you, while keeping your risk in check.  With that said, lets take a look at the technical picture.  Basic technical analysis, step 1 is to identify support and resistance levels.  Key support levels seem to be 11.20, and 9.80.
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Pyramid those profits!

by: Jordan J. Weir

We’ve all heard the age old adage, cut your losses short, and let your profits ride. Yet the vast majority of traders don’t use this concept to its fullest. The proper application of this single, pivotal piece of advice, is usually the difference between showing a profit at the end of the month, and showing a loss. This method is known as “pyramiding your profits”.

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ETF Basics

by: Jordan Weir

For many years, investors have attempted to diversify their overall portfolios by trying to pick stocks across a diverse set of asset classes. Which is all well and good, but the problem it generally runs into is you should also be diversified within any given asset class, lest something adverse happen to the company you happened to bet on. Yet as soon as your diversifying both within, and between asset classes, now your running a portfolio of potentially 40+ equities, and even the active investor rarely has time to do due diligence on the hundreds of companies required to find 40 excellent investments. Read the rest of this entry »

Shorting Stock - The path to riches in a troubled economy

Every day, the stock market seems to continue its precipitous drop towards worthlessness, crushing hopes, dreams, and investors in a flurry of dizzying price movements. Yet there is an answer; a light in the darkness, used by the masters of investment to generate excess returns even - no, scratch that, - especially in falling markets like this one.
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