Go to studies

Edit studies

Select: simple moving averages

Then double click that twice to add two studies of simple moving averages

Then modify them the way the picture shows them.

how to setup 200 day moving averages on think or swim

I added the 50 and 200 Day Moving Averages.

The second picture I sent are my graphs all modified. This was sent in an email I couldn’t post it here. Email me if you want them.

This is a screenshot of the financial indices, notice it is struggling to get over 200 DMA? Not good for overall market.

Regards

www.csquaredtrading.com

Ben Brinneman

                      

If this type of thing does not interest you please disregard and my apologies for sending it.

Ok, so I was looking at some charts tonight on BP and combining that with reading articles. Attached is a chart, and some data that I was going through. If I am crazy for thinking this, please write me back, but basically I am going short (this is a way to make money on a stock for the downside) on BP (British Petroleum) according to 3 things. If I get this right in my account I may soon retire Just kidding, but seriously… ( I would not try this at home)

My 3 reasons

1. Chart on BP looks horrendous. Absolute capitulation.

2. The data posted below.

3. Gut feeling.

My Price Target on the downside is $25.80 for now. and the second sell-off to $20. IF they get the well capped all bets are off.

Please read below. Very Interesting. May be the short of a lifetime besides Bear Stearns and Lehman Brothers.
In an exploration plan and environmental impact analysis filed with the federal government in February 2009, BP said it had the capability to handle a “worst-case scenario” at the Deepwater Horizon site, which the document described as a leak of 162,000 barrels per day from an uncontrolled blowout — 6.8 million gallons each day.
Now, I am warning that the amount of oil still in the reservoir might be much bigger than BP is admitting.

Specifically, BP claims that there are 50 million barrels worth of oil in the reservoir underneath the leaking spill site.

But the Guardian noted Friday:

But the 50m figure cited by Hayward took some industry insiders by surprise. There have been reports the reservoir held up to 500m barrels – the figure quoted by Hayward’s questioner, Joe Barton, a Republican from Texas.

“I would assume that 500m barrels would be a more likely estimate,” said Tadeusz Patzek, the chairman of the department of petroleum and geosystems engineering at the University of Texas at Austin. “I don’t think you would be going after a 50mbarrel reservoir so quickly. This is just simply not enough oil to go after.”
Indeed, Wolf Blitzer said:

One — one expert said to me — and I don’t know if this is overblown or not — that they’re still really concerned about the structural base of this whole operation, if the rocks get moved, this thing could really explode and they’re sitting, what, on — on a billionpotential barrels of oil at the bottom of the Gulf of Mexico.
Bloomberg notes:

The ruptured well may hold as much as 1 billion barrels, the Times reported, citing Rick Mueller, an analyst at Energy Security Analysis in Massachusetts.
Oil industry expert Matthew Simmons also puts the number above one billion barrels (see thisBloomberg interview, for example, where he says that – unless stopped – 120,000 barrels a day will leak for 25-30 years; that adds up to 1,095,000,000 to 1,314,000,000 barrels).

And Rob Kall claims that a source inside BP tells him:

Size of reservoir – estimated by BP and its partner, Andarko to be between 2.5B and 10Bbbl. (that’s 100,000,000,000 gallons and 400,000,000,000 gallons).
Yes – all of those numbers are BILLIONS.
Given that BP’s nearby Tiber and Kaskida wells each contain at least 3 billion barrels of oil (see this,this, this and this), estimates of more than a billion barrels for the leaking Macondo reservoir are not unreasonable.

Basically if this well blew up and billions of oil leaked into the ocean it would be the worst thing to ever happen to BP and in the world as far as manmade disasters go.

I used to work as a CDO Bond Trader and here is some more data as far as counterparties that would also blow up. RIG, APC and several credit facilities that banks are holding for this company.

BP’s Bankruptcy Would Impair 117 (18% Of Total) Collateralized Synthetic Obligations, Lead To Pervasive Losses

Even as increasingly desperate falling knife catchers try to convince someone, anyone to buy up some or all of their shares of BP stock, which is certainly on its way to a guaranteed doubling, tripling or more, the real investing community is ever more carefully looking at the worst case, and its implications. Said implications would be vast, and in addition to wiping out billions in capital from BPs direct counterparties which are already limiting their BP exposure, a topic we touched upon briefly previously, would also impair indirect holders of pre-packaged securitized BP exposure. Today Moody’s provides an analysis of which CSOs (just like CDOs but packed purely with synthetic products – think Goldman’s Abacus) would be impaired should BP go bankrupt. The rating agency does not stop there, and also analyzes what a bankruptcy of BP peers Halliburton, Anadarko Petroleum, Transocean Inc., and Cameron International would look like, and who would be wiped out. Below are the results, which upon further analysis will likely indicate total loss potential well beyond BP’s total outstanding debt exposure.

As the recent civil case involving Goldman and the Abacus (and soon potentially others) CDO showed, collateralized products have a special place in the heart of the regulators, due to their avalanche quality of blowing up seemingly completely unrelated entities, which share merely the stupidity of having invested in the same entity. BP, as a company with over $20 billion in debt outstanding, has over the years, seen many of its CDS packaged and repackaged in the form of many and increasingly more complex CSOs. Last week’s blow out in BP spreads, in which the 1 Year CDS surged beyond 1,000 bps, has got many people concerned: the least of which are counterparties that are on the other side of the short risk trade. Others include investors in just such CSOs, and other companies whose CDS comprises various tranches in these synthetic obligations, as forced liquidations in any given CSO would result in the blow out spreads in even perfectly solvent companies who just have the displeasure of being packaged in one and the same CSO.

Moody’s summarizes:

In the event of BP’s restructuring or bankruptcy, CSO transactions referencing BP or its affected subsidiaries may experience what is called a “credit event.” If the credit event occurs, the CSO transactions will have to meet their payment obligations to the protection buyers, which will result in the loss of subordination to the rated CSO tranches. In cases where the subordination is no longer available, CSO investors will incur the loss.
The rater elaborates:

Last week, credit default swap (CDS) spreads on BP plc widened to all-time highs, reflecting the mounting costs of the Gulf of Mexico oil spill and the ensuing rating actions. BP’s credit deterioration is in turn a credit negative for collateralized synthetic obligation (CSO) transactions that reference BP or the companies involved in the Gulf incident.

Rising Costs of the Spill. After almost two months of unsuccessful attempts to stop the worst oil spill in history, BP is potentially facing billions in containment, clean-up, and litigation costs. It is unclear what these expenses will ultimately amount to over the coming years, as the assessment of the damage is just beginning.

BP Downgraded, CDS Spreads Widen. Our recent downgrade and placement on watch for further possible downgrade of BP and its guaranteed subsidiaries reflects intensified risk that the extended oil spill in the Gulf of Mexico will significantly siphon the company’s free cash flows. Spreads on BP’s credit default swaps rose as much as 124.5 basis points (bp) in one day to a record 630.6 bp as of 16 June 2010. BP’s debt maturing next year recently traded at distressed levels, and there is a growing concern among credit investors over a scenario where BP plc might default.
Enjoy your evening,

www.csquaredtrading,com

Regards,

Ben Brinneman

                      

These were just a few of the nuggets I was able to uncover in a wide ranging, extended interview with Charles on Hedge Fund Radio. Why should I give a damn what he thinks? Because he called the exact April 26 top in stocks in my interview with him on Hedge Fund Radio, all the way back on December 12 (click here for the call at http://www.themadhedgefundtrader.com/december-12-2009-charles-nenner-and-the-cycle-analysis-system ). He then repeated that prediction in my March 11 interview (click here for that call at http://www.themadhedgefundtrader.com/march-11-2010-interview-with-charles-nenner ). That’s the kind of record that keeps me thirsting for more. While Charles normally charges his top drawer clients a king’s ransom for his views, I managed to pry a few gems out of him for some bottles of the fiery Dutch liqueur, Jenever, next time I am in Amsterdam.

The bespectacled Renaissance man hails from Holland, where his firm, Charles Nenner Research, is based. He has a long career that includes stints at medical school, Merrill Lynch, Rabobank, and ten years at Goldman Sachs. He has spent three decades developing his proprietary Cycle Analysis System, which generates calls of tops and bottoms for every major market in the world.

Nenner developed a huge, global following after 2007, when he accurately nailed the top in the Dow at 14,500 and urged his clients to put on short positions when everyone else was steadfastly predicting that the market would keep grinding higher. I have been following Charles’ daily research reports myself for three years, and found them to be uncannily accurate. But you have to follow him daily, because the calls can come hot and heavy. Miss one, and you’re on the wrong side of the trade. Today, he counts major hedge funds, banks, brokerage houses, and high net worth individuals among his clients. You can find out more about Charles’ work at his website at www.charlesnenner.com.

My Bols drinking friend has recently had such a hot hand, that he would be the envy of the brow beating Texas hold-em crowd. He put out an alert to clients in mid April to simultaneously sell the (SPX) at 1187 and buy ten year Treasuries ahead of a deflation scare when they were yielding 4%. Within weeks, bonds delivered a ferocious ten point rally, chopping yields to 3%. For good measure, he also put out a short in oil (USO) at $88, almost instantly catching a plunge down to $67.

The wily Dutchman sees stocks bottoming this week above the recent 1,033 low, and then launching into a summer rally. Since Friday, he has been picking up early cycle stocks like Goldman Sachs (GS), Apple (AAPL), American Airlines (AMR), Amazon (AMZN), and Intel (INTC) to catch the move for a trade.

This is all presaging a much bigger spike down for stocks in the fall. Looking back over the past 100 years, equities reliably delivered 10% annual compound returns. Then in 1990 returns suddenly escalated, and stayed high for nearly 20 years. Now it’s our turn to revert to the mean and overshoot to the downside, bringing stock investors no end of pain. The next swoosh down will be more violent and longer than anything we have seen so far, so fasten your seatbelt. Ten year Treasuries will trade around a 3% band for the rest of the year.

Regarding currencies, Charles has a target for the euro (FXE) at $1.18. The doomed continent will have to suffer many years of deflation to get out of its current debacle. Since hedge funds will be reducing risk, they will be covering yen carry trade shorts (YCS), confining the Japanese currency within a ¥90-¥95 range, despite lousy fundamentals and a dysfunctional government. His favorite currency to own for the long term is the Australian dollar, which will continue to benefit from rising interest rates.

Charles sees emerging markets (EEM) remaining cool for the rest of the year, but still likes them for the long term. Ditto also for commodities, which aren’t going anywhere as long as a double dip recession is on the table. The recent sell off in copper is especially foreboding. Natural gas looks dire, and could hit $1.70 before it gets completely sold out.

Although there’s a trade here on the short side in gold (GLD), he is still a long term bull, and sees the barbaric relic eventually catapulting to $2,500 an ounce. Silver (SLV) should rise to $20.50 on the next bump up.

Nenner sees a major long term bull market in corn, wheat, and soybeans launching after the summer, once the perfect weather gets fully priced in. This is one of the few areas where you will be able to buy and then forget about it.

Charles passed several more pearls of wisdom on to me. To catch them all, please listen to his entire interview on Hedge Fund Radio in its entirety by clicking here at http://www.madhedgefundtrader.com/june-7-2010-charles-nenner.html .

This was posted by madhedgefundtrader

                      

1. There was a bollinger band squeeze which had been preceeded by a rise in the stock price over the last few days after a big sell off.

2. Now that we had confirmation the stock was headed up we purchased it in a narrow range and put a stop below the low of the day.

3. The stock broke out strong into the close so we held overnight for a solid swing trade.

4. Because of the light volume this morning we continued to watch and the stock remained strong we rebought at the low and just sold at the high of the day.

The part about trading, is that you have to have a strategy. If you are reading this post right now you would be able to pull up a chart of LIWA and see that it is under $9. What a great place on the chart to buy for an income trade, these are just ideas for the day. Anyways the FED will probably hold rates steady and give a forward guidance and that is the part to listen for. The market will prolly take off because it has failed to go lower in the last few days and people are wanting in the rally still.

MARKET UPDATE:

Crude and precious metals hit fresh session highs in recent trading as the dollar index extended its losses and hit new morning lows… April crude chopped around the unchanged line overnight before gaining traction around 5:00ET. Crude gained further strength around the open of pit trading and hit today’s current high at the top of the hour at $81.34 per barrel. Currently, crude is just below those highs at $81.19 per barrel, up 1.7%. April natural gas is trading independently this morning from crude and precious metals. However, overnight, natural gas did remain trading right around the unchanged line. Highs of $4.42 per MMBtu were hit shortly before pit trading began, but that was short-lived as the energy component quickly reversed into negative territory and fresh session lows of $4.33 per MMBtu. Currently, natural gas is 0.9% lower at $4.35 per MMBtu… Precious metals are strong today. April gold and May silver both spiked around 9:00ET to new session highs of $1127.00 per ounce and $17.48 per ounce, respectively. Currently, gold is 1.8% higher at $1125.60 per ounce, while silver is 1.9% higher at $17.44 per ounce.

                      

Rebought NEP in the trading account for 3000 shares at 9.04 and started buying CCME here at these prices. Gotta put that capital to work.

Here is the amazing thing about LIWA, we bought at 8-8.40 and it runs all the way to $10. This was based using our stock market system that I sell on here for a minimal $299 and $399 which we will make back almost immediately. Once you sell on our strategy with a massive return it runs all the way back down to $9!!!!!! So we might have a chance to buy in the 8’s again. The rule is never to chase but take your gains, and maybe just maybe let a small amount ride. In these small cap stocks without un-sustained volume they tend to run right back down to cheap prices. Hopefully you are learning and earning at the same time!

Please email me back with your Profits and Losses for encouragement!

Here is a market update:

Greece’s long-awaited austerity plan wasn’t enough for participants to forget about the fiscal troubles that still face the likes of Spain and Portugal. That left the stock market unable to sustain solid, broad-based gains… Led by the materials sector, stocks made their way to fresh one-month highs. The materials sector had been up as much as 2.0% before it saw that gain cut in half. Still, materials saw the best gain of any major sector as a combination of momentum and a weaker dollar provided it with support… Weakness in the greenback came as the euro and British pound rebounded from recent losses, which were frequently attributed to the fiscal woes that face the likes of Greece, Portugal, and Spain… Greece attempted to quell concern over its fiscal health with the release of a new austerity plan that includes civil service salary cuts and a sales tax increase. Despite such plans, problems persist for Portugal and Spain. That reality caused Europe’s major bourses to show little initial reaction to Greece’s plans, but the continent’s major averages gradually pushed higher to log strong gains… U.S. equities were unable to mimic the move. The Dow, Nasdaq Composite, and S&P 500 each added modestly to the previous session’s gains, but eventually rolled over. That left the stock market to finish flat after three straight gains… The afternoon slide left the S&P 500 below the 1125 line, which many traders believe could act as a springboard for further gains if the stock market closes above it… Economic data received little attention this session. That’s essentially because participants remain cautious ahead of the official nonfarm payrolls number on Friday. Cautious trade also led to light trading volume, which failed to surpass 1 billion shares on the NYSE… A glimpse into the payrolls report was given with the February ADP Employment Change Report, which indicated that 20,000 private payrolls were shed last month. The number was in-line with expectations and the smallest decline in one year… Meanwhile, the ISM Services Index for February came in at 53.0, which was above the reading of 51.0 that had been widely expected and marked the highest reading since October 2007… The Fed’s Beige Book, which is largely full of anecdotal economic news, came with little surprise. It indicated that nine of the 12 Fed districts reported modest improvement in economic activity during February, while consumer spending improved slightly in many districts… Commodities had a strong session that pushed the CRB Commodity Index back above its 50-day moving average. Oil futures prices closed 1.5% higher at $80.87 per barrel, despite a larger-than-expected weekly inventory build of 4.03 million barrels. Silver had another strong session and closed with a 1.6% gain at $17.33 per ounce. Dow -0.1%, Nasdaq unch., S&P 500 unch.

Regards

Ben Brinneman

                      

By Josh Funk, AP Business Writer , On Saturday February 27, 2010, 2:49 pm

OMAHA, Neb. (AP) — Berkshire Hathaway Inc.’s fourth-quarter profit bounced back sharply, thanks largely to an unrealized $1 billion gain on derivative contracts and investments.

Warren Buffett’s company said Saturday that its insurance and utility divisions performed well enough to help offset weakness in subsidiaries hurt most by the weak economy, such as NetJets, Acme Brick and other manufacturing and retail businesses.

Berkshire generated $3.056 billion in net income, or $1,969 per Class A share, during the quarter. That’s up from $117 million net income, or $76 per share, a year ago.

The three analysts surveyed by Thomson Reuters had expected Berkshire to report fourth-quarter earnings per share of $1,208.33 on average.

Berkshire said it generated $30.2 billion revenue in the fourth quarter. That is nearly 23 percent higher than last year’s fourth quarter revenue of $24.6 billion.

A year ago, largely unrealized losses of $3.3 billion from Berkshire’s investments and long-term derivative contracts weighed heavily on the Omaha-based company’s fourth quarter profit. But the value of the company’s investments and derivatives, some of which are tied to the value of stock market indexes, was significantly higher at the end of 2009 and added a $1.03 billion gain.

Buffett reiterated Saturday that he believes the derivatives will be profitable over their lifetime, partly because Berkshire held about $6.3 billion in derivative premiums at year end that it can invest.

Berkshire released its annual report along with Buffett’s letter to shareholders Saturday. The company describes the performance of its subsidiaries throughout 2009 in those reports, but doesn’t break out detailed information about the fourth quarter alone.

Buffett said Berkshire’s insurance unit, which includes Geico and reinsurance giant General Re, remains the “engine behind Berkshire’s growth” because the insurance companies give the company money to invest at little or no cost from premiums it holds until claims must be paid. That money, called float, grew to $62 billion at the end of 2009.

Buffett said Geico had 8.1 percent of the auto insurance market in 2009, but the company’s growth may slow this year because of slumping vehicle sales and high unemployment.

Berkshire’s insurance businesses generated $1.01 billion in net income from underwriting in 2009, down from $1.7 billion last year. But the investment income in the insurance division grew to $4.1 billion in 2009 from last year’s $3.5 billion.

Berkshire’s utility division, which includes MidAmerican Energy Holdings Co. and PacifiCorp, added $1.07 billion net income during 2009, down from $1.7 billion in 2008.

In future quarters, Berkshire’s utility division will include its newest subsidiary, Burlington Northern Santa Fe railroad. Buffett said the railroad’s results and capital-intensive business are similar to a utility, so it made sense to put BNSF with Berkshire’s utilities.

The manufacturing, service and retail unit at Berkshire generated less than half the profit it did the previous year. Those businesses generated $1.1 billion in net income in 2009, down from $2.3 billion the year before.

Those businesses suffered because of the recession last year, and many of them, such as Acme Brick and Shaw Carpet, are tied to construction.

“These businesses continue to bump along the bottom, though their competitive positions remain undented,” Buffett said.

Berkshire owns roughly 80 subsidiaries, including clothing, furniture, jewelry and corporate jet firms, but its insurance and utility businesses typically account for more than half of the company’s revenue. It also has major investments in such companies as Coca-Cola Co. and Wells Fargo & Co.

Berkshire Hathaway Inc.: http://www.berkshirehathaway.com

                      

DIA SPY QQQQ SMH AAPL AFAM AGM AMED AMZN ATVI BAC CBAK CCME CHBT CHL CHOP CLDX CREE EGMI F GAXC GGWPQ GNW GS HEAT LIWA NEP HIG LNC MIC NFP MOS POT SEED FEED RINO TRIT TSTC NFP SYNM TIE X

Starting with the indices…

The indices are sitting at the 50 day support/resistance. Wavering Wavering. Boring.

CLDX is the only thing on my list that has started to move significantly to the upside. This was my latest trade idea that generated right at 20% so far and I believe still has some upside to it. I will update if I see anything on it that would change its story, but so far so good.

GNW hit new 52 week highs today, lots of strength, but could be a great short with our stock market system as it has hit some resistance. Watch it.

BAC looking strong

CBAK I bought this at 2.43 according to our stock market system and sold at 2.43 no upward movement so I decided to put my capital where it would work.

CHL long the june 52.50 calls

EGMI is halted and now a worthless stock because of a possible fraud within the company.

(Here are the current numbers which are accessible to anyone. Unless the company hired a chef instead of a CFO right from the get-go these should have been accurate.

- They have 12m+ in the bank
- They have a debt / equity ratio of 0%. In other words they have no debt
- Their return on sales is roughly 46%
- Their return on equity is over 35%

Whatever the case, there has long been a struggle for power at EGMI, I’m not sure of the exact details, but I imagine that the board & management are at odds based on the lack of execution over the last few months. I think this power struggle lead up to the events of last week.

I believe there is a chance that they do have the 12m cash that they always claimed to have. We have no choice but to wait, and hope that there is something brewing internally and we’ll hear all about it next week before the stock re-opens. Whatever the case, even if they have a glowing story and “it was all just a big misunderstanding” the stock will likely drop before it moves back up. Borrowed from Bullsonwallstreet.com)

NEP is riding up with Oil and has found its trading range here in the upper 9’s, on a dip, will be a great buy again and again. With our stock market system we nailed NEP at 7.86!

GAXC I keep a peripheral eye on this anything under .90 cents Ill start accumulating it again.

LIWA is so cheap right now thats all i have to say (buy buy buy)

CHOP has no volume but wait till some fund sees it true potential and starts to buy it. IFLG is a good example of what could happen in one day to these equities that are super undervalued.

CREE Looking to buy the calls once it dips 2-4 bucks will let you know.

TSTC I mentioned at 10 now at 20 and some change. This has some really good volatility but I have yet to purchase any shares and try it for a swing trade or investment. Great company. Strong company.

MARKET UPDATE:

Stocks rolled over in the final few minutes of trade to log their first loss in five sessions. The downturn came after the stock market failed to extend a move that took it from a modest loss back to its opening high… Financials were integral in the afternoon advance. The sector was a steady outperformer for the entire session and finished with a 1.1% loss, despite a lack of clear catalysts within the sector. While the broader market inevitably failed to follow the financial sector to a gain, its strength helped limit losses… Technical support at the S&P 500’s 50-day moving average also provided support. The line acted as a floor for trade during the entire session. It even held firm as stocks extended their opening slide into negative territory amid news that President Obama has proposed to broaden the Medicare Hospital Insurance tax base in his latest health care reform plan. Despite the negative reaction to the news item, health care stocks finished fractionally lower… Energy stocks were the worst performers. They shed 1.3%. Schlumberger (SLB 61.57, -2.33) was a primary laggard following news that it has agreed to a stock-for-stock merger with Smith International (SII 41.03, +3.33)… In other merger and acquisition news, Thermo Fisher Scientific (TMO 48.10, -1.12) has made a $6 billion bid for Millipore (MIL 87.35, +16.01)… Treasuries traded in quiet fashion this session. Results from an $8 billion auction of 30-year TIPS did little to stimulate interest in the space. As such, the benchmark 10-year Note finished just a few ticks lower… The dollar also traded quietly along the flat line. Its movements had little overall effect on the broader market… Trading volume was paltry once again as fewer than 1 billion shares traded hands on the NYSE. Dow -0.2%, Nasdaq -0.1%, S&P 500 -0.1%, Nasdaq 100 -0.3%, S&P 400 unch., Russell 2000 +0.1%

Until next time;

HAPPY TRADING!

the C² Trading Team

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This coming week I am going to be much more aggressive in my trading. I am currently up 10% for the month of February and 20% for the month of January. My stock market system is simply a strategy that takes a lot of real time practice as you work towards learning to become a full time trader.

I wanted to quote some Think and Grow Rich by Napoleon Hill. Out of his 31 major causes of failure, I will quote one of my favorites.

Lack of a well-defined purpose in life.
There is no hope of success for the person who does not have a central purpose or definite goal at which to aim. Ninety-eight out of every hundred of those whom I have analyzed had no such aim. Perhaps this was the major cause of their failure.

This makes me ponder what is my goal in investing and trading? What are my financial goals? What are my life goals, and where can I help others. Where can I fulfill my goals and help others in living a more productive life and be more efficient at their daily tasks.

Think of some of your own daily trading and long-term investing goals, write them down, pursue them and you will succeed.

Here is a link http://www.finviz.com/quote.ashx?t=nep,gnw,mic,x,cree

to see what a stock does when it hits new highs, it generally gains momentum and goes higher.

NEP above 6 and goes and almost doubles.

GNW anything above 13.68 and then 15.20, it went higher and higher.

CREE just hit new highs should continue much higher.

X just turning around moving higher and wants to fill that gap. WATCH out above.

Market Summary

The Fed’s decision to hike the discount rate after the prior session’s close stirred market participants to dump stocks in pursuit of the dollar, but the dollar inevitably drifted lower and stocks managed to recover and finish the week with their fourth straight gain… Given that the Fed’s decision to lift the discount rate to 0.75% from 0.50% marked the first rate hike in one year, participants panicked a bit and made a knee-jerk decision to sell stocks. The announcement shouldn’t have come as a complete surprise, though. After all, Fed Chairman gave market participants a clue during his recent testimony before the House Financial Services Committee that a modest increase in the spread between the discount rate and the target federal funds rate was expected before long… Still, to help quell concern about what may be in store, the Fed expressed that its decision was not a signal for any change in the economy or monetary policy. Several Fed officials made similar, separate comments of their own about how to interpret the move, but many seemed to ignore the notion that the increased discount rate was a tacit sign that the financial system is back on firmer footing… In conjunction with the announcement the dollar was pushed higher, such that the Dollar Index climbed as much as 0.5% to new multimonth highs and even broke through a key technical resistance level that restrained its gain in the previous session. However, the greenback eventually rolled over and finished at a session low with a 0.5% loss against a basket of foreign currencies… A softer-than-expected inflationary reading played a hand in the dollar’s downturn. The Consumer Price Index (CPI) for January made a 0.2% monthly gain, which was slightly below the 0.3% increase that had been widely expected. Excluding food and energy, consumer prices for January actually slipped 0.1% month-over-month, instead of the 0.1% monthly increase that economists had forecast… As the dollar surrendered its gain, stocks were able to regroup and make a broad-based bounce to positive territory. The move took the S&P 500 above its 50-day moving average to a one-month high, but buyers didn’t step in at the higher price points to help stocks extend the move into something more meaningful. As a result, stocks traded with choppy action into the close and left the stock market to settle with a modest gain, in-line with its 50-day moving average. Still, that was enough to give the stock market its fourth straight advance and a weekly gain of more than 3% — its best weekly performance in three months. Dow +0.1%, Nasdaq +0.1%, S&P 500 +0.2%, Nasdaq 100 unch., S&P 400 +0.5%, Russell 2000 +0.4%

Have a great weekend.

Ben Brinneman

                      

I continue to be cautious and see where I can join the momentum play but really havent seen anything significant lately. I did purchase some SEED to see if they would move in my favor over a buyout interest from several investors.

I alsop purchased 3000 shares of CHOP today for another trade and we shall see is what I wrote next to my description of why I traded it.

There are some signs that the economy is recovering but things are still in the pooper. The Philadelphia Fed Business Outlook increased from 15.2 to 17.6 in February. The consensus expected the index to increase to 17.0. The index has remained positive for seven consecutive months and signals further growth in manufacturing. The details of the report were strong. Growth spiked in new orders as the index increased from 3.2 to 22.7. Shipments increased from 11.0 to 19.7. The increase in shipments, however, was mostly due to the filling of old orders as the unfilled orders index declined from 3.6 to -7.5. Inventories posted the first positive month since September 2007. The increase is in-line with the Q4 aggregate manufacturer inventories data.

I will continue to trade and train my subscribers on how to buy and sell securities in a timely and profitable fashion. I am also learning more strategies to put together and to show others how to endeavor in this weird, boring, id rather “watch paint dry” market

                      

Near the bottom of this article is the Comparison CHART[ad]

The areas that are circled are the comparisons, see how they match each other in a similar way. One main difference is that the plunging of our sell-off didn’t start until about one year into the bear market whereas in the Great Crash it happened almost overnight. Either way we have declined about the same percentage amount. If the rest plays out to match the 1930’s we could see the Dow 2000’s. I hope that never happens but the reality is that we are in a really bad economy not just in the United States but globally speaking! This makes the market a traders market and a great place to learn to trade and profit from the volatility.

Like any sports star that took years to figure out how to bat the ball, make a 3 point shot, or kick a field goal, trading and investing also takes a hundreds of hours of practice. The sports industry has produced a number of successful traders and investors. To name one, Pete Najarian, the Pit Boss, is ranked one of the top 100 traders by Trader Monthly magazine, is co-founder of optionMONSTER.com, a news and information site for options traders. Following a football career that included several seasons with the NFL’s Tampa Bay Buccaneers and Minnesota Vikings, Najarian took up options trading in 1992 joining his brother, Jon ‘DRJ’ Najarian, at Mercury Trading, a market-making firm at the Chicago Board Options Exchange (CBOE). Two years later, he assumed responsibility for Mercury’s risk and arbitrage and later led its entry onto the New York Stock Exchange (NYSE). (quoted from http://www.cnbc.com/id/18945714)

There are others that failed at the game. Lenny Dykstra being one of them. Dykstra played for the New York Mets during the late 1980s before playing for the Philadelphia Phillies during the early 1990s. He threw and batted left-handed and played primarily as a leadoff hitter. (quoted from http://en.wikipedia.org/wiki/Lenny_Dykstra) In August 2009, Dykstra was living out of his car and in hotel lobbies. He owes more than $30 million to investors of which he lost all their money in the market crash of 2008 and beginning of 2009.

One strategy that is used by traders to avoid catastrophe in unknown waters is one that I will describe below. This is not a majeur force strategy just a way to earn some income in the markets while being indecisive about going all in with your sideline cash and investing for the long haul. Until all this mess with the economy blows over , you will want to wait for big-sell-offs of various equities especially in the over-bought emerging markets such as China. Currently there has been a large sell-off in Chinese ADR’s listed on the american markets and they have presented some good buying opportunites fundamentally (numbers) and technically (charts) speaking.

Below is a written out version of part of my strategy which works extremely well in this market.

These companies that I have researched, traded, and invested in have been outperforming the market on a day-to-day basis. Even when the U.S. markets are down, my account will remain flat or even go up because of the resilience of these companies. Many of these equities have a “low float” (a low number of shares outstanding), precluding that whenever a flood of buying occurs, the stock soars or vice versa the stock tanks on selling, a lot faster than an equity with a large number of shares outstanding, such as existing U.S. companies that are listed.

Value-Growth Chinese companies are relatively undiscovered, and once investors realize what potential future growth they have, they will be drooling at their low PEs and beautiful fundamentals and piling in. I would be cautiously optimistic allocating only 35% of my portfolio in China.

I have a dynamic watch list, 13 trading rules, and a training video that I give out for free at www.csquaredtrading.com, but the most important part is the strategy that I have developed with a partner over the last ten years in order to trade in and out of these volatile and uncertain markets accurately. Without this, you fellow trader and investor, are merely shooting in the dark like a midnight cowboy as you trade. Even if you are investing, this will help you create a margin of safety on your purchases. This is where a sports fanatic can relate as it ties in to having an edge in what you do. Has somebody ever covered a topic or a problem and never handed out a possible solution? Well I have outlined just a few things below to keep in mind when purchasing or selling a stock.

A million-dollar-banker buddy of mine used to purchase stocks he liked at whatever price. Now he calls me to verify a good entry point on a company that he loves! The strategy is named the Triple-Whammy Trading Technique. Below is a description of a piece of the puzzle and how it works. (Remember there are many other moving parts to the market and this is just part of the many tools required) You may need to do a bit of research to figure out what some of these words below mean.

(Important Note: The Triple-Whammy Trading Technique only works well if the direction of the Bollinger Bands is primarily from left-to-right, rather than primarily up or down)

Set up your chart: Make your chart-settings as follows:

(1) Time Period: For day trading, 30 minutes or one hour; for swing trading, 3 days or longer
(2) Chart Style: Candlestick
(3) Chart Frequency: For day trading, one minute; for swing trading, 10, 15, or 30 minutes
(4) Upper Indicators: EMA (9 period) and Bollinger Bands (20 period)
(5) Lower Indicators: MACD (12, 26) and RSI (14)

Now you’re ready to proceed.. There are three essential components of this set-up:

For quick profits with a Triple-Whammy Perfect buy (Buy-Low-then-Sell-High; or Buy-to-Cover Short-Sell), these three legs are as follows:

(1) The candlesticks will violate the lower Bollinger Band.
(2) RSI must fall into oversold territory, under 30, and preferably in deeply oversold territory, under 20.
(3) The MACD (blue) line must be under the signal (red) line, and falling; and then must turn back upwards and cross the signal line. The crossover is the final confirmation — but if the turn upward is sharp enough, you know it’s getting ready to do a crossover, so it’s best to go ahead and act, if the prior two conditions are already in place.

For quick profits with a Triple-Whammy Perfect sell (ShortSell-High-then-Buy-Low; or Sell-to-Close Long Position), these same three legs are as follows:

(1) The candlesticks will violate the upper Bollinger Band.
(2) RSI must rise into overbought territory, over 70, and preferably in steeply overbought territory, over 80.
(3) The MACD (blue) line must be above the signal (red) line, and rising; and then must turn back downwards and cross the signal line. The crossover is the final confirmation.

This strategy is available as well as an additional advanced strategy that we just put together called the VWAP Support Swing Setup. Both of these strategies will greatly enhance your trading right away by informing you of the trading ranges that you are in and how to enter and exit your trades. There are other various disciplines for learning how to participate in the market, however I would have to write a book and not an article to cover those points.

As time goes on you will notice the shift into other emerging markets and you will wonder how come I did not participate? You will eventually be able to correctly identify these companies with a little bit of research and some technical analysis, and not only that, but make a brilliant entry into the equity/investment. Buffet even mentions entry, or margin of safety as a critical part to his investment thesis.

Another item to mention is that the market never discounts the same thing twice. In other words the news that is currently out has already been priced into the market. It would take a major bank failure to really crack this market lower (my vote is C Citigroup Bank). If this happened then everyone would start selling on the news and grabbing profits from the last six to eight months where they have just ridden the upward wave. GDP was positive 5.7% but most of that number came from an increase in businesses buying to re-stock their low inventory. This does not mean customers are flocking to their stores and purchasing. Consumer spending is still weak (except in China and Brazil).

A discovery for Alzheimers or Leukemia could be in the making for this year strengthening the bio-tech sector as a relatively good sector to be involved with.

Financial reform is in order for 2010, stagnating bank growth for the next year or two. However, whenever bank reform is in the air the powerful boys of Wall Street will create new financial vehicles to earn more and more money. Where do you think Private Equity, Hedge Funds, and Bundled Securites came from? Historical bank reform leads to present investment vehicle modifications.

With all this said I want to summarize by saying we need to remain cautiously optimistic about where we invest our cash into these precarious markets. If we do get a pull back to those Great Depression like lows, it will be a good time to hedge your portfolio with some short sales, and book profits from the recent March Lows meanwhile keeping your money at work trading and investing following a specific set of rules. Continue practicing no matter what happens whether that be in sports, life or the trading and investing.

Here is the chart.

Bear Market Chart Comparison

Until next time;

HAPPY TRADING and INVESTING!

the C² Trading Team

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