Today, I’d like to follow up on our previous look at the 20-period RSI for the S&P 500 (shown in the bottom panel of the chart below). This indicator has been near a breakout for several weeks.  You may recall that the 20-period RSI is useful as regime indicator. In a bullish market regime, the indicator stays above 40. In a bearish regime, it stays below 60. In the chart, thin horizontal lines mark the 40 and 60 levels. The red zones indicate moves below 40.  Despite last week’s gains, the indicator remains below 60, which is a cause for… Read More

Today, I’d like to follow up on our previous look at the 20-period RSI for the S&P 500 (shown in the bottom panel of the chart below). This indicator has been near a breakout for several weeks.  You may recall that the 20-period RSI is useful as regime indicator. In a bullish market regime, the indicator stays above 40. In a bearish regime, it stays below 60. In the chart, thin horizontal lines mark the 40 and 60 levels. The red zones indicate moves below 40.  Despite last week’s gains, the indicator remains below 60, which is a cause for concern.  ​ I expected a breakout last week as traders reacted to earnings from Apple, Facebook, and Amazon. Instead of a defined breakout, the S&P 500 just drifted higher.  The index has now retraced more than half of the decline that came at the end of last year. That’s bullish. But we remain about 1.3% below the 200-day moving average (MA), shown as the solid blue line in the chart. This is a widely followed indicator, and I expect the test of the MA will be a topic of conversation on CNBC this week. A close above the MA is… Read More

One of the most important lessons I learned during my days in the Army was the KISS principle: Keep it simple, stupid. Outside of the military, one of the greatest minds of all time believed in the KISS philosophy, but Albert Einstein expressed the idea in more poetic terms: “Everything should be made as simple as possible, but not simpler.” —Recommended Link— A Hacker’s Guide To Stock Arbitrage… (And Getting Away With $37,000) (All you need is an online brokerage account and your laptop.)  Click here for all the details… I bring that same mindset to investment analysis. I… Read More

One of the most important lessons I learned during my days in the Army was the KISS principle: Keep it simple, stupid. Outside of the military, one of the greatest minds of all time believed in the KISS philosophy, but Albert Einstein expressed the idea in more poetic terms: “Everything should be made as simple as possible, but not simpler.” —Recommended Link— A Hacker’s Guide To Stock Arbitrage… (And Getting Away With $37,000) (All you need is an online brokerage account and your laptop.)  Click here for all the details… I bring that same mindset to investment analysis. I want every process to be as simple as possible, but not so simple that I’m leaving out anything important. While I have spent a great deal of time studying complex investment techniques, what I discovered is that the KISS principle applies in investment analysis as well as it did in the military. #-ad_banner-#For example, although I look at complex valuation models, the simple PEG ratio consistently identifies undervalued stocks. The PEG ratio compares the price-to-earnings (P/E) ratio to the growth rate of earnings per share (EPS). A stock is considered fairly valued when the PEG ratio is equal to 1,… Read More

Stock prices ended last week slightly above the important resistance levels I outlined last week. You can see this in the daily S&P 500 chart below.  ​ After two days of trading this week, prices still had not cleared that level.  As I noted last week, resistance is a level where a price advance is expected to stall. I identified three specific factors — the March lows, the 50-day moving average (MA) and the 50% retracement of the October-to-December decline. On Friday, the S&P 500 had closed above each of those levels… which would have been a strong signal… Read More

Stock prices ended last week slightly above the important resistance levels I outlined last week. You can see this in the daily S&P 500 chart below.  ​ After two days of trading this week, prices still had not cleared that level.  As I noted last week, resistance is a level where a price advance is expected to stall. I identified three specific factors — the March lows, the 50-day moving average (MA) and the 50% retracement of the October-to-December decline. On Friday, the S&P 500 had closed above each of those levels… which would have been a strong signal that the bear market was ending.  But when the market opened Tuesday morning, things got off to a rough start. Over the course of the day, the S&P 500 gave back some of the prior week’s gains and closed below 50-day MA and 50% retracement level.  So, does this mean we’re in for another round of gains… or does it signal further losses to come?  —Recommended Link— 3 Shots At Making 1,000% Or More. Jim Fink’s new stock picking system just hit on three companies that could put up to $330,000 in your pocket. And… Read More

As the stock market enters earnings season, I’m feeling concerned… and it seems like I’m not the only one.  My bet is that we can expect volatility in the coming weeks. Our trading strategy over at Profit Amplifier focuses on avoiding risk, and one way we can do that is by adding exposure to utility stocks — a defensive sector that traders turn to when they are looking for low-risk trades.  Time To Get Defensive While looking through my screens, I found a very attractive call option trade in Southern (NYSE: SO), a gas and… Read More

As the stock market enters earnings season, I’m feeling concerned… and it seems like I’m not the only one.  My bet is that we can expect volatility in the coming weeks. Our trading strategy over at Profit Amplifier focuses on avoiding risk, and one way we can do that is by adding exposure to utility stocks — a defensive sector that traders turn to when they are looking for low-risk trades.  Time To Get Defensive While looking through my screens, I found a very attractive call option trade in Southern (NYSE: SO), a gas and electric company (and the second-largest utility stock in the United States, in terms of customer base).  #-ad_banner-#Southern’s fundamentals are solid, with cash flow from operations growing steadily. The company is headquartered in Atlanta and serves a part of the country that enjoys relatively stable weather at this time of year, which reduces the risk of a natural disaster disrupting operations. Analysts expect the company to announce earnings around February 21, so picking a call option that expires before then further decreases risk.  The chart confirms my bullish outlook. After recently breaking above its 200-day moving average (MA) — the solid… Read More

The next week will be an interesting week in the stock market. Of course, there’s never any shortage of events that could change the outlook for the market one way or another… But according to a chart of the S&P 500, it looks like we’re at an important technical resistance level. Resistance is an important technical term for a price level where a security’s advance is expected to stall. In other words, it’s a price level where sellers appear, and their actions can often be anticipated. In the chart below, I’ve labeled three factors that are all pointing toward resistance… Read More

The next week will be an interesting week in the stock market. Of course, there’s never any shortage of events that could change the outlook for the market one way or another… But according to a chart of the S&P 500, it looks like we’re at an important technical resistance level. Resistance is an important technical term for a price level where a security’s advance is expected to stall. In other words, it’s a price level where sellers appear, and their actions can often be anticipated. In the chart below, I’ve labeled three factors that are all pointing toward resistance near the S&P 500’s current level around 2,600… 1. The March lows (blue dashed line): Many investors like to buy stocks when they approach previous lows, as it often represents a “safe” bargain price. We saw this in action back in October and November, when stocks fell to their March lows (which then represented “support”) and were met with aggressive buying. However, stocks suffered a rapid loss in December, so anyone who bought at last year’s lows is just getting back to even. From what I’ve observed, many traders tend to sell the moment their positions get back… Read More

I’m starting the New Year by reading some of the classics to develop a deeper understanding of some investment concepts. Among the concepts I’m researching… is the Keynesian beauty contest. Economist John Maynard Keynes used the “beauty contest” to explain why stock prices move up and down. —Recommended Link— Radical New Accelerated Dividend Program Lets YOU Pick When To Get Paid Attention Income Investors: That’s right, you pick your own “ex-dividend” date. I’ve already collected $119,247 In “Bonus Dividends” this way… on top of my regular dividends. While Keynes is deservedly… Read More

I’m starting the New Year by reading some of the classics to develop a deeper understanding of some investment concepts. Among the concepts I’m researching… is the Keynesian beauty contest. Economist John Maynard Keynes used the “beauty contest” to explain why stock prices move up and down. —Recommended Link— Radical New Accelerated Dividend Program Lets YOU Pick When To Get Paid Attention Income Investors: That’s right, you pick your own “ex-dividend” date. I’ve already collected $119,247 In “Bonus Dividends” this way… on top of my regular dividends. While Keynes is deservedly recognized for his economic insights, he was also a great investor. From 1924 to 1946, he managed a fund for King’s College from 1924 to 1946. Over that time, the benchmark stock market index in Great Britain declined 15% as the Great Depression and World War II weighed on the market. Keynes delivered a total return of more than 1,160% during that time, an average annual return of about 12% a year. #-ad_banner-#To explain how he thought about the stock market, Keynes compared investors to readers of a newspaper that sponsored a beauty contest. (This book was published in 1936,… Read More

I’m hearing more and more from stock market bulls. What are they saying? Well, most of them are excitedly pointing to the big gains we saw the past Friday and on the day after Christmas when the Dow Jones Industrial Average gained 1,086 points — the largest one-day gain in history. —Recommended Link— This Unique Income Investment Pays You Every Week Don’t risk your nest egg just to collect a puny dividend check once a quarter. You’re tying up too much capital for a puny payment! Especially when you could be using the income strategy… Read More

I’m hearing more and more from stock market bulls. What are they saying? Well, most of them are excitedly pointing to the big gains we saw the past Friday and on the day after Christmas when the Dow Jones Industrial Average gained 1,086 points — the largest one-day gain in history. —Recommended Link— This Unique Income Investment Pays You Every Week Don’t risk your nest egg just to collect a puny dividend check once a quarter. You’re tying up too much capital for a puny payment! Especially when you could be using the income strategy that’s generating an average of $565 in extra cash EVERY week. Join us today and collect your first instant cash payment starting this Wednesday. Rather than arguing, I’d simply like to take this time to mention that eight of the 10 biggest days in the Dow have happened during bear markets. I’d like to dive into what this really means for the market in just a second. But first, let’s take a look at the data… Not To Burst Anyone’s Bubble, But… Let’s go back to the green table above showing the big… Read More

I hope you had a happy holiday season, but unfortunately, I have some news that may dampen your spirits. —Recommended Link— REVEALED: The 9 Biggest Things To Happen To Investing In 2019 Your 2019 investment “cheat sheet” is ready… Our annual Game-Changing Stocks Predictions have left many readers stunned. Some wondered if we had some kind of crystal ball on the market… others asked if we were getting away with insider trading. And this year… could hold our biggest reveal yet… Click here to see what 2019 has in store for you. (But if you stick with me through… Read More

I hope you had a happy holiday season, but unfortunately, I have some news that may dampen your spirits. —Recommended Link— REVEALED: The 9 Biggest Things To Happen To Investing In 2019 Your 2019 investment “cheat sheet” is ready… Our annual Game-Changing Stocks Predictions have left many readers stunned. Some wondered if we had some kind of crystal ball on the market… others asked if we were getting away with insider trading. And this year… could hold our biggest reveal yet… Click here to see what 2019 has in store for you. (But if you stick with me through the end, I promise to send you on your merry way with some good news…) The chart below summarizes the state of the stock market. As I write this, the S&P 500 now stands at 2,351.10 — officially 20% below the all-time high it set back in September. It is also more than 14% below its 200-day moving average (MA), which is shown as the solid line in the price window. Prices have fallen quickly, and the question is now whether we should expect a bounce higher in the short term. PAM Predicts Short-Term Reversal Coming Soon… Read More

As the end of the year approaches, many of us look back. Changing the calendar presents an opportunity to think about the past, and that often includes a review of the most important events of the year. For traders, one of the most important events of 2018 was the selloff that occurred in February. The chart of the S&P 500 below details how that all unfolded over several months. At the time, it seemed like the bull market had ended. Initial selling was followed by increased volatility and then a period of time when prices moved sideways. Now,… Read More

As the end of the year approaches, many of us look back. Changing the calendar presents an opportunity to think about the past, and that often includes a review of the most important events of the year. For traders, one of the most important events of 2018 was the selloff that occurred in February. The chart of the S&P 500 below details how that all unfolded over several months. At the time, it seemed like the bull market had ended. Initial selling was followed by increased volatility and then a period of time when prices moved sideways. Now, at the end of the year (as I write this), we are seeing a 12% selloff and a period of increased volatility. As always, the biggest question in the market is what comes next. According to technical analysis, what comes next is most likely further downside… Chart Predicts Future Downside In Stocks This chart is the same as the first, but it adds a 200-day moving average (solid blue line in the upper panel) and my Profit Amplifier Momentum (PAM) indicator in the lower panel. Let’s look at the 200-day MA first. The 200-day MA is important to… Read More

Last weekend, while many market analysts were starting to feel optimistic, I was apprehensive. There wasn’t anything decisive in the agreement between President Trump and the Chinese president besides an agreement to talk. —Recommended Link— If You Ignore This… You’re Missing Half The Market Since 1926, one collection of stocks has accounted for HALF of the S&P’s return — through every market environment imaginable. If you don’t have this group in your own portfolio, you could be missing out on the single best place to put your money this year and next. Learn which stocks can… Rather than buying… Read More

Last weekend, while many market analysts were starting to feel optimistic, I was apprehensive. There wasn’t anything decisive in the agreement between President Trump and the Chinese president besides an agreement to talk. —Recommended Link— If You Ignore This… You’re Missing Half The Market Since 1926, one collection of stocks has accounted for HALF of the S&P’s return — through every market environment imaginable. If you don’t have this group in your own portfolio, you could be missing out on the single best place to put your money this year and next. Learn which stocks can… Rather than buying into the hype, I told my Profit Amplifier readers I would be watching the market for proof that the bear market in stocks had ended. Specifically, I said… #-ad_banner-#…I will be watching interest rates, soybean prices, and the stock market. For now, the weight of the evidence remains bearish. But gains in soybeans and interest rates would indicate stocks could delay a bear market for now. Well, soybeans didn’t move much. Prices are up 0.4% since December 3 and recorded most of the week’s gains at the open last Monday. Traders in grain markets seem to be taking my approach… Read More