Technical analysis is a hot topic in investment circles.  Everyone from internet forum participants to billion dollar hedge fund managers seem to have a strong opinion about its value. The advent of online investing with its free access to trading platforms offering every type of technical indicator and chart type has made technical analysis the default analysis tool for the average investor. However, many investors do not understand how to properly utilize or even view technical analysis as an investing tool. #-ad_banner-#First, why am I qualified to talk about this? Well, I have been observing, investing, and… Read More

Technical analysis is a hot topic in investment circles.  Everyone from internet forum participants to billion dollar hedge fund managers seem to have a strong opinion about its value. The advent of online investing with its free access to trading platforms offering every type of technical indicator and chart type has made technical analysis the default analysis tool for the average investor. However, many investors do not understand how to properly utilize or even view technical analysis as an investing tool. #-ad_banner-#First, why am I qualified to talk about this? Well, I have been observing, investing, and actively trading the financial markets since 1990. I have studied technical analysis both as a practitioner and academically, in addition to interacting with and sometimes interviewing many of the giants in the investment business. The following five points are my conclusions about this controversial investment subject. 1. Art Not A Science Since the start of the financial markets, investors have tried, mostly in vain, to quantify technical analysis and turn it into a science. Price charts are open to interpretation by the observer. One technical analyst will think a particular pattern is bullish, while another will… Read More

The current smackdown in the cryptocurrency markets has many investors questioning the wisdom of holding through the selling. I, however, remain a crypto bull in the major currencies. Here’s why: 1. Nasdaq Embraces Cryptocurrency The market just took a vast but underappreciated step toward the legitimization of cryptocurrency.  The Nasdaq stock exchange stated that it is open to becoming a cryptocurrency exchange.  An established and respected financial marketplace, such as the Nasdaq, embracing cryptocurrency is another bullish step in making the burgeoning blockchain world mainstream.   #-ad_banner-#While roadblocks, such as an accepted regulation framework, remain a stumbling block for… Read More

The current smackdown in the cryptocurrency markets has many investors questioning the wisdom of holding through the selling. I, however, remain a crypto bull in the major currencies. Here’s why: 1. Nasdaq Embraces Cryptocurrency The market just took a vast but underappreciated step toward the legitimization of cryptocurrency.  The Nasdaq stock exchange stated that it is open to becoming a cryptocurrency exchange.  An established and respected financial marketplace, such as the Nasdaq, embracing cryptocurrency is another bullish step in making the burgeoning blockchain world mainstream.   #-ad_banner-#While roadblocks, such as an accepted regulation framework, remain a stumbling block for the mainstreaming of crypto, Nasdaq’s openness to the market is a definite first step. Nasdaq CEO Adena Friedman told CNBC, “I believe that digital currencies will continue to persist, it’s just a matter of how long it will take for that space to mature. Once you look at it and say, ‘do we want to provide a regulated market for this?’ Certainly, Nasdaq would consider it.” Additional bullish news from Nasdaq includes a collaboration with the Gemini crypto exchange.  Founded by the Winklevoss Twins of Facebook fame,  Gemini is on the forefront of making crypto trading safer and less prone… Read More

Have President Trump’s protectionist policies gone overboard?   Once heralded as the most pro-business U.S. president since Ronald Reagan, Trump’s zeal to shelter American businesses from global competition has caused many free-market economists to question his wisdom.   The stock market has benefitted wildly from the White House’s corporate tax reform.  Bulls remain in charge, but things are rapidly changing. #-ad_banner-#Trump’s protectionist actions, combined with his erratic nature, have cast doubt on the markets. The stock market hates uncertainty and doubts beyond all else. Trump’s negotiating style has dumped uncertainty into the markets at an unprecedented degree.   Nowhere is… Read More

Have President Trump’s protectionist policies gone overboard?   Once heralded as the most pro-business U.S. president since Ronald Reagan, Trump’s zeal to shelter American businesses from global competition has caused many free-market economists to question his wisdom.   The stock market has benefitted wildly from the White House’s corporate tax reform.  Bulls remain in charge, but things are rapidly changing. #-ad_banner-#Trump’s protectionist actions, combined with his erratic nature, have cast doubt on the markets. The stock market hates uncertainty and doubts beyond all else. Trump’s negotiating style has dumped uncertainty into the markets at an unprecedented degree.   Nowhere is this economic uncertainty more vivid than the rapidly deteriorating U.S.-China trade relations.   Make no mistake, Trump’s idea of fighting China’s unfair trade practices is noble.  However, his heavy-handed uncertainty in execution is resulting in greater economic harm than good.  In fact, it may completely erase his tax reform-fueled market gains overtime.   The proposal of hitting the world’s second-largest economy with 25% tariffs on $50 billion of imports will not only hurt the Chinese economy, it will have severe effects domestically.   China will not quietly sit still and accept the new tariffs; it will retaliate with a slate… Read More

Berkshire Hathaway recently reported its equity holdings through Form 13-F and caught the market by surprise with some additions and sales. As the market fixates on individual purchases and sales, I’ve found looking more broadly at the portfolio reveals valuable insight into Warren Buffett’s outlook on stocks. #-ad_banner-#In fact, Buffett’s portfolio is surprisingly concentrated in just three industries. Combining this with position changes in individual stocks, investors may be able to get ahead of The Oracle of Omaha by investing in best-of-breed companies within the industries. What’s In Warren Buffett’s Portfolio? Buffett took the lead in 1965 and has… Read More

Berkshire Hathaway recently reported its equity holdings through Form 13-F and caught the market by surprise with some additions and sales. As the market fixates on individual purchases and sales, I’ve found looking more broadly at the portfolio reveals valuable insight into Warren Buffett’s outlook on stocks. #-ad_banner-#In fact, Buffett’s portfolio is surprisingly concentrated in just three industries. Combining this with position changes in individual stocks, investors may be able to get ahead of The Oracle of Omaha by investing in best-of-breed companies within the industries. What’s In Warren Buffett’s Portfolio? Buffett took the lead in 1965 and has rewarded investors ever since. Returns on shares of Berkshire Hathaway have climbed 20% annually over the last 38 years, easily beating the S&P 500. That means instant market buzz anytime the company files its Form 13-F, a regulatory disclosure of portfolio holdings, which was released  May 15 showing first-quarter activity. The media loves to go straight to the individual stocks and changes in Buffett’s portfolio when a new 13-F is filed each quarter,  but a wider view can be just as instructive in revealing his outlook on the market. The Berkshire equity portfolio includes just 42 companies for a total… Read More

One of my favorite TV shows of the ’80s was “The A-Team.” While short on being highbrow entertainment, the show was long on stuff blowing up and catchphrases. While Mr. T’s “Fool!” was the fan favorite, I was always partial to the cigar chomping Colonel Hannibal Smith’s “I love it when a plan comes together.” If he had been long in oil in mid-March, he’d be breaking out the stogies. Two months ago, I published an article profiling oil and where it was going. It came in right on target. #-ad_banner-#After a big move in a short time is the… Read More

One of my favorite TV shows of the ’80s was “The A-Team.” While short on being highbrow entertainment, the show was long on stuff blowing up and catchphrases. While Mr. T’s “Fool!” was the fan favorite, I was always partial to the cigar chomping Colonel Hannibal Smith’s “I love it when a plan comes together.” If he had been long in oil in mid-March, he’d be breaking out the stogies. Two months ago, I published an article profiling oil and where it was going. It came in right on target. #-ad_banner-#After a big move in a short time is the run done? Not yet. Let me add a caveat to that. While the upside in the actual black, dead dinosaur and plant matter stuff may be limited, a lot of oil-related stocks have not participated in the move for one reason or another. Here are some that make sense and are trading at attractive levels. Enbridge Energy Partners LP (NYSE: EEP) — Focusing on petroleum liquids gathering, transportation and storage.While the unit price took a painful 27% hit after the Federal Energy Regulatory Commission’s tax policy ruling regarding master limited partnerships (MLP’s), analysts are confident that Enbridge can cover its… Read More

The U.S. dollar has exploded, forcing stock investors to pay attention. The strength or weakness of the currency can have tremendous influence over stock prices, making it critical for investors to understand the correlation. Market prices are influenced — both positively and negatively — depending on the sector and direction of the U.S. dollar.  A strong dollar benefits some industries while hurting others. Right now, the USD is on its way back up. #-ad_banner-#After 2017 was spent in an aggressive downward trend, the greenback bottomed in January 2018, proceeding to build a technical price base for the next 12-plus weeks. Read More

The U.S. dollar has exploded, forcing stock investors to pay attention. The strength or weakness of the currency can have tremendous influence over stock prices, making it critical for investors to understand the correlation. Market prices are influenced — both positively and negatively — depending on the sector and direction of the U.S. dollar.  A strong dollar benefits some industries while hurting others. Right now, the USD is on its way back up. #-ad_banner-#After 2017 was spent in an aggressive downward trend, the greenback bottomed in January 2018, proceeding to build a technical price base for the next 12-plus weeks. At the start of April 2018, the currency started to tick higher until technical resistance at both the 50 and 200-day simple moving averages were broken on the upside. Now, with the support of both major moving averages, there is little doubt that a substantial uptrend has been established. I have little doubt that the greenback’s climb will continue for the rest of 2018 at a minimum. The combined factors of upside technical price momentum, advancing interest rates, and improving economy provide little choice for the U.S. currency to do anything but gain strength. Now that we have established that… Read More

I struggled to write this article since I love Tesla’s cars and genuinely want to believe in Elon’s vision.   I am an automobile fanatic, having owned multiple sports cars and other vehicles, so I am speaking from experience when I say I was blown away by the performance, handling, and ergonomics of the Model S. The jump from 0-100 MPH was breathtaking at under 5 seconds thanks to the silent explosive electric power.   #-ad_banner-#Investors have been crazy over the stock for the last five years.  I can’t say I blame them, with shares returning over 400% compared to… Read More

I struggled to write this article since I love Tesla’s cars and genuinely want to believe in Elon’s vision.   I am an automobile fanatic, having owned multiple sports cars and other vehicles, so I am speaking from experience when I say I was blown away by the performance, handling, and ergonomics of the Model S. The jump from 0-100 MPH was breathtaking at under 5 seconds thanks to the silent explosive electric power.   #-ad_banner-#Investors have been crazy over the stock for the last five years.  I can’t say I blame them, with shares returning over 400% compared to the S&P 500’s return of 66% during the same time frame. But no matter how much I want to embrace the stock, it no longer makes sense. Remaining objective is a crucial trait for successful investors, and after researching Tesla, the shares remain extremely overvalued. The stock is trading lower by around 8% this year, and I expect further downside over the next 18 months. Here are five reasons to short Tesla now: 1. The Fundamental Metrics Stocks are anticipatory mechanisms, meaning they are priced based on expected performance. In Tesla’s case, the current standard fundamental metrics are so… Read More

There’s a long list of headwinds facing the stock market. They include everything from rising interest rates and oil prices to Donald Trump’s Twitter account. But the most important question facing investors right now is whether these headwinds are hazardous to investor portfolios. #-ad_banner-#So, let’s look at some of the most important headwinds facing the stock market. Specifically, which of them pose the greatest threat to the market and which are mostly no cause for alarm. Interest Rates The 10-year Treasury hit the 3% mark last Tuesday. It’s the first time since 2014 the 10-year has hit this level. Read More

There’s a long list of headwinds facing the stock market. They include everything from rising interest rates and oil prices to Donald Trump’s Twitter account. But the most important question facing investors right now is whether these headwinds are hazardous to investor portfolios. #-ad_banner-#So, let’s look at some of the most important headwinds facing the stock market. Specifically, which of them pose the greatest threat to the market and which are mostly no cause for alarm. Interest Rates The 10-year Treasury hit the 3% mark last Tuesday. It’s the first time since 2014 the 10-year has hit this level. Of course, higher rates means increased borrowing costs are on tap for American consumers and corporations alike. Now, most analysts believe the 10-year yield above 3% puts the bull market run in jeopardy. And while there is data to indicate rising rates do materially impact stock market returns, it is more complicated than that. You see, investors price a company’s stock as the value of all its future cash flows discounted to today. If interest rates go up, those future cash flows are worth materially less today. As such, the market value of stock must fall to compensate for the… Read More

Cryptocurrency bears have had a field day since the price plunge. Every social media platform and even mainstream news services have been overrun with negative commentary as cryptocurrencies gave back 50% or more of their gains over the last few months. #-ad_banner-#Even the mighty bitcoin nosedived from nearly $20,000 per coin to around $6,300 per coin in just a few weeks.  During the price crash, even avid crypto bulls started to question the wisdom of holding onto newly their minted wealth.   What’s Going On? Being such a young market, there is genuinely no history to determine what is… Read More

Cryptocurrency bears have had a field day since the price plunge. Every social media platform and even mainstream news services have been overrun with negative commentary as cryptocurrencies gave back 50% or more of their gains over the last few months. #-ad_banner-#Even the mighty bitcoin nosedived from nearly $20,000 per coin to around $6,300 per coin in just a few weeks.  During the price crash, even avid crypto bulls started to question the wisdom of holding onto newly their minted wealth.   What’s Going On? Being such a young market, there is genuinely no history to determine what is normal and what is abnormal price behavior. One thing is for sure:  volatility is the nature of the beast. The millions of new traders who entered the market during the massive uptrend loved the volatility when it was making 12-year-olds millionaires in a matter of months. However, once the volatility turned the tables on the bullish masses, all the noobs panicked, declaring that the bubble had burst. Fueled by the sensation-seeking media machines, the panic selling resulted in downside volatility soaring and prices plummeting. At the same time, those who understand how markets really work waited patiently for the ideal… Read More

I’m always baffled when I read an article that’s negative about the practice of technical analysis. I probably shouldn’t be surprised — not because I don’t think it works (it clearly does), but because it seems folks these days have strong opinions on the extreme ends of nearly every issue or topic. —Sponsored Link— Elites DON’T Collect Social Security — They Collect This Nixon: $2196/mo… Rep. Cunningham: $14,667/mo… Nearing or in retirement? This could be the most important message you’ll see in 2018. In the investing world, there are basically two… Read More

I’m always baffled when I read an article that’s negative about the practice of technical analysis. I probably shouldn’t be surprised — not because I don’t think it works (it clearly does), but because it seems folks these days have strong opinions on the extreme ends of nearly every issue or topic. —Sponsored Link— Elites DON’T Collect Social Security — They Collect This Nixon: $2196/mo… Rep. Cunningham: $14,667/mo… Nearing or in retirement? This could be the most important message you’ll see in 2018. In the investing world, there are basically two schools of thought: fundamental analysis and technical analysis. And to a vast majority of investors, there’s no middle ground. Here at my premium service, Maximum Profit, we disagree. We take what we believe is the best of both worlds and combine them to create our proprietary “MP Score.” But I digress. #-ad_banner-#When I come across an article that’s dismissing technical analysis, I usually read it — even though I usually know what it’s going to say, as most of the nay-sayers usually spout the same myths. That’s because, at one point in my career, I espoused the same beliefs. You… Read More