frankz

I’m always intrigued by huge bases because generally a prolonged period of contraction leads to an extended period of expansion.  By far this is my favorite set up.  No one has a better "basing" definition than Stan Weinstein, author of Secrets For Profiting In Bull and Bear Markets.   The Basing Area: "After XYZ has been declining for several months, it eventually will lose downside momentum and start to trend sideways.  What's actually taking place is that buyers and sellers are starting to move into equilibrium, whereas previously the sellers were far stronger, which is why the stock had plummeted. [...]

Vocaltec Communications ($CALL) is now trading above an 8-month base that has kept the stock between $6.75 and roughly $8.50. This is after being in a relentless downtrend since March of 2014, that probably wiped out a lot of holders. I’m always intrigued by huge bases because normally a prolonged period of contraction leads to a prolonged period of expansion. The base tells you that the buyers and sellers have found an equilibrium.  Slowly but surely as the stock continues to trade sideways, the buyers start to take control.  By the time the finally breaks-out to the upside, it usually [...]

As I write this the Dow Futures are up 210 points, the Dow has now rallied 1,000 points in a few hours from the low it registered Monday when a few were calling for a replay of 1987.  A thousand points seem a little dramatic, but percentage wise is 6.7%, nothing to sneeze at. The market has become extremely volatile, until the volatility subsides you have to be careful chasing huge rallies and selling huge sell-offs.  I still believe that the current situation is playing out just like the summer of 2011 did, which I explained HERE.If we continue to [...]

The Dow Jones closed up 620 points.What used to take weeks to months to play out will probably take days to weeks now.  With all the real-time information, easy access to accounts, and social media, investors can now panic in real time.  And panic happens in both directions.Keep calm, it is not over.My name is Frank Zorrilla, a Registered Advisor in the State of New York.Getting Started Is EasyThe Most Important Charts In The World Right NowIs The End NearKeep This In Mind Before You Jump Off The LedgeThe History Of Crashes8 Facts About ShortingDon't Try To Avoid The Unavoidable

Sentiment plays an enormous role when it comes to investing, when people throw in the towel and panic you can forget about studies, stats, history, etc., everything takes a back seat.  Unfortunately, decisions are made by the mass when they reach a point when they can no longer take the pain. That is normally at the tail end of the move.  When this happens, it takes them a long time to trust the market again.  The charts below help you visualize what all investors go through.By no means do I want you to look at these charts and say; "I'm [...]

If you wanted an out, then the market is giving you a gift today.  Dow futures are up 600 points and the 1987 crash callers are now changing their tune.  We are not out the woods yet, the reaction we see today is an example of what the market does; it goes up AND down, not up OR down. Nothing goes down in a straight line or up in a straight line.  A lot of people panicked at the open, sold and lost some real money. These will be the same people that will shy away from the market for [...]

Every year is different, the dynamics of the market are always changing. However, we can look at previous years and situations to get clues on how to go about what is going on currently. Today is not 1987, a day when the Dow Jones lost 20% plus for the day.  A better comparison might be 2010 and 2011, the latter to be more precise.2010 2011From 7/25/2011 to 8/8/2011 the SPY lost 16% in 11 trading days, the Nasdaq 100 lost 15%, and the Russell 2000 lost 21.6%. In the last five trading days, the SPY on a closing basis has lost [...]

Stay calm, don't panic, if you didn't have a plan coming into this carnage then there is nothing you can do now to change what just happened. Stay away from all the fear mongers, or that this is 1987 all over again, etc.  In 1987, the market was down 24% in one day, we are down 3.5% as I write this. Stocks returned over 400% in the 80's all people talk about is 1987, hat tip, Ben Carlson.When you look back at all the previous corrections you can focus on what happened when the correction was occurring, the few painful days/months [...]

"The higher the VIX, the higher the clicks"--Phil Pearlman.  Nowadays you will never get more hits on a blog post than when you write one about crashes.  Fear sells; if you can get a once in a lifetime crash call correct you will be immortalized for years regardless if you get everything wrong afterward.  Remember, Elaine Garzarelli, Marc Faber, Nouriel Roubini, Meridith Whitney, Hussman, Peter Schiff, etc.Here are a few things to remember;The market goes up and down not up or down.Corrections and outright bear markets are painful.Big money is made after corrections, the bigger the better, live to fight [...]

Over the last couple of years every time the market pulled back a little it seems the majority of people believe, act, and brace themselves for the next big crash.  All you have to do is look at how the $VIX spikes with the littlest of pullbacks. Many immediately want to go out there and short to capitalize in the inevitable decent pullback that at one point we are going to experience.  However, shorting is very tough game, a game that has gotten even tougher after 2009, and if one wanted to venture on that side of the field then you should [...]