frankz

The Spiders Select Sector Energy ETF $XLE peaked on June 23. 2014, at $101.29 right alongside oil. XLE is down 31.94% since it peaked and at one point it was down 41.75%, and then ProShares put in the bottom for the XLE..Many investors have given up on the energy names due to its recent performance.  This is an ongoing cycle that has been around forever, overweight what has been working and ditch what has not.  When investors give up it is usually the best time to get involved.The fact that ProShares on 9/24/15 came out with an SP500 ETF minus [...]

The SP500 has had a massive rally from oversold levels, and a sentiment shift is now taking place.8/24/15 It's 1987 all again, get me out!9/28/15 Carl Icahn's Danger Ahead video, I can't go through 2008  again, get me out!10/8/15 FOMO, the SP500 just rallied 7%, I can't afford to miss this train.The Fear Of Missing Out is real, especially for professionals.  Here's when things get pushed to the limit in fear of losing the clients who want all the upside but none of the downside.  "Nothing teaches you what a dread disease short-terminism can be quite like getting to the [...]

The market is now up five days in a row since Carl Icahn's "looming catastrophe" video.  We explained the importance of that video here Danger Ahead.  If you remember, at the time the Russell 2000 was down eight days in a row, the Nasdaq composite was down six days in a row, and the entire world was betting on a break of the August 24 lows. The things is; that the market goes up and down not up or down.  After seeing all the negativity on my twitter stream, I decided to tweet some of the things that can go right [...]

SP500 Field Guide To Corrections, The Most Important Chart In Your Tool BoxDanger AheadYour Trading Is All WrongWork With MeStay Informed

The market has been under pressure since July; a majority have an interest in calling the next big crash.  On August 21st some were calling for 1987 style crash (ridiculous), others immediately pointed out that this might be 2008 all over again when we lost 50%.  Most recently Carl Icahn made headlines with another major correction call, might be the 3rd one in 4 years, Danger Ahead.The bottom line is that fear sells.  Nothing gets a blogger more hits than a blog post about the next upcoming crash, regardless of how far fetch it is.  The media gets the most [...]

The market continues to be under pressure; the SP500 closed down 2.57%, -8.5% for the year and down 11.6% since its high on 7/20/15.  The biotech sector (XBI) which at one point was the best performing sector (+45%) for the year is now down year to date and in full liquidation mode.The market is getting oversold here short term. Currently, we only have 13% of stocks above their 40-day moving average, a level where the market has tended to bounce from.  However, if the current scenario plays out like 2011 which so far it has, we then have to be on the [...]

In my opinion, there is no right way or wrong way in this business.  Your P&L is your daily, weekly, and monthly report card.  There're a million ways to skin a cat in the stock market. Value players buy distressed beaten down stocks, others are momentum traders who buy stocks that are moving up, you have the mean reversion players, trend-followers, passive investors, etc. Some investors draw lines on charts and look for patterns, others need a reason why they should buy something, that gives them the comfort that some thinking actually took place. You are always going to have [...]

Everyone wants to be a contrarian nowadays; they make a big deal out of every indicator that validates their thesis.  Going against the crowd just to go against it is not contrarian, I explained that here in a recent post-The Crowd Is Right Within A Trend, Wrong At Turning Points.The American Association Of Individual Investors is a sentiment indicator that has been getting a ton of press lately.  It measures the percentage of individual investors who are bullish, bearish, and neutral on the stock market for the next six months.  Individuals are polled weekly.  The survey consists of normally 100-350 [...]

It is important to know why you are buying a stock, is it for technical reasons, fundamental reasons, or a combination of the two.  If you bought a stock for technical reasons, then you must adhere to technical breakdowns.  The last thing you want to do is purchase a stock on technical grounds, then when the stock goes against you; you start reading the company's headlines, the 10k, who major holders are, etc,.  Basically selling yourself why you should avoid taking a loss (take the loss).There is a big difference between a company and its stock.  In the short term, [...]

Everyone wants to be a contrarian nowadays.  I'm of the opinion that if the market is trending lower it is only natural for investors to feel bearish. It's human nature.  What you want to look for is for sentiment to be at an extreme.  But, more importantly note that a contrarian approach works better in the stock market when you are looking for a bottom than when you are looking for a top.Currently, the market is in a downtrend, the natural feeling for most investors is to feel bearish. Those who suffered significant losses after the 2000 top and the [...]