The Trend

Never Overlook Support and Resistance Levels

Understand how the market moves, and you increase your odds of success.

In theory, markets are pushed higher and lower by fear and greed -- two of the strongest psychological drivers of all assets. 

For example, many times you’ll hear technical analysts refer to the ongoing tug of war between bulls and bears, or the struggle between buyers, which represent demand, and sellers, which represent supply.  When looking at fear and greed on a chart, we begin to look at the technical parameters of support and resistance, or a price floor or ceiling.

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Kroger: One of the Most Ridiculous Overreactions

Traders overreact.  They do it every day. 

And if you can spot it in time, you could make a fortune.

Look at Kroger Company (KR), for example. 

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Gap Trading Basics

All of a sudden, there’s a gap in the chart of your favorite stock.

Surprise news, earnings, something unexpected caused a bout of extreme optimism or pessimism that resulted in the move.

Look at Palo Alto Networks (PANW), for example. 

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Using Fibonacci in Technical Analysis

Nobody ever said trading was easy.

But as long as you’re prepared, the easier it becomes. Especially if you’re trading with technical analysis tools, such as Fibonacci retracements.


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How to Spot a Correction (and What to Do about It)

Two of the biggest catalysts in any market are fear and greed.

We’re told to buy excessive fear and sell excessive greed. 

Quite often, though, traders will sell on fear and buy on greed.  But that can be a costly error, one that even Warren Buffett can attest to.  To this day, he still advises that a “climate of fear is your friend when investing; a euphoric world is your enemy.”  And of course, we all remember his advice to “be fearful when others are greedy and greedy when others are fearful.”


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Oh Snap: We Tried to Warn Them

We tried to warn them.

But the hype was just too hot to ignore. 

On February 9, 2017, we noted that the Snap IPO “could be more trouble than it’s worth” based on overvaluation concerns alone.  It wasn’t a safe bet.  It never was.  Any one that did any research knew that. At 60 times earnings, it would be one of the hottest IPOs to hit the market.  Just to justify that valuation, it would need to grow its bottom line quick.

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How to Technically Trade the News

“Don’t trade the news,” they say.

You’ll lose money.  But the “experts” have it all wrong.

Trading the news is a seductive trap for those who aren’t in tune with major stock market trends.  They don’t realize that in most cases, the market’s already baked the news “into the cake” by the time it’s reported.


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Technical Analysis: The Case for Gold

Whenever the Federal Reserve even hints at higher interest rates, traders sell gold.

They fear gold would lose its shine, as compared to yield-bearing assets when interest rates begin to rise.  In fact, it’s why gold had five straight days of losses prior to the June 2017 Federal Reserve meeting on rates.  But with history as our guide, that’s a terrible reason to exit the trade.

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A Sure Way to Know When to Sell High

Buy low, sell high -- it’s an easy rule to follow. 

Unfortunately, selling is often the hardest part. 

“Jeez, if only I held that stock for one more day.  I could have been up another $2,500” is often the thought process.  What we fail to consider is that we made money.  We accomplished the initial goal.  Better yet, we didn’t lose anything.

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School of Hard Knocks: The Most Expensive Lesson

We’ve all been there.

At some point, we’ve all been new to trading. 

We don’t even know how to buy a stock or even an option.  We’re not sure where to start, or even whom we should be talking to. Unsure, confused, and lost when it comes to choosing the right broker many of us choose the broker with the hottest offer at the time. 

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Infrastructure Spending and the Economy

It happened again.

In late May 2017, we highlighted several instances of President Trump’s Midas touch.  Anything having to do with cement, cyber security, banks, infrastructure, and defense rocketed higher on the year all by simple mention from Trump.

By June 2017, he did it again.

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The Trump Effect: The “Behind the Scenes” Opportunities

In late May 2017, we highlighted Trump’s Midas touch.

Then, lo and behold it happened again days after.

We already mentioned the $350 billion deal with the Saudis, and noted that defense stocks exploded to all-time highs, as a result. 

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The Trump Effect: How the POTUS Impacts Your Trades

Apparently, he has the Midas touch.

Infrastructure stocks exploded on President Trump’s trillion-dollar promise.  For example, H&E Equipment (HEES) flew from $12.40 to $27 as a result. 

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One of the Worst Trades to Take

“Hedge funds have never been this long crude oil,” blared the headlines in February 2017.

By March 2017, oil would plunge from a high of $55 to $47.

“Hedge funds have never been as bearish as they are right now,” they blared in May 2016.

At the time, the Dow traded at 17,500.  It’s now up to 20,884.

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Crash Alert: How to Prep for the Next One

It was only a matter of time. 

Mid-May 2017, the Dow Jones Industrials plunged 300 points in a day.  People panicked.  Investors leapt from trades.  Stop losses were taken out.  Fear gripped the markets, sending the Dow well under its 50-day moving average support line.

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How Ransomware Creates Opportunity

We weren’t prepared.

And it’s very likely, we’re won’t be ready for the next one.

In early May 2017, it only took hours before 200,000 companies, hospitals, government agencies, and organization in more than 150 countries found their computer files held for ransom.


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Retail Apocalypse: The Most Important Lesson Learned

In 10 years, the retail industry will look nothing like it does now.

That’s what Warren Buffet, the Oracle of Omaha, had to say when asked about retail at the Berkshire Hathaway meeting in early May 2017. 

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