Latest Headlines

12.01.09
Russian Wild Card

These defiant actions probably did not come as a complete surprise to Israel. In the last month, Israeli Prime Minister Benjamin Netanyahu has met in closed-door sessions with U.S. President Obama, as well as French President Sarkozy and German Foreign Minister Westerwelle, attempting to rally support for meaningful trade sanctions and to make a case for a pre-emptive strike against Iranian nuclear facilities. We suspect that the Israeli intelligence organization had already obtained information on the Iranian policy shift. Mr. Netanyahu will be in Berlin this week, for further discussions.

11.30.09
Trading Range

Last Thursday, Dubai’s quasi-default on a $3.5 billion bond sent shockwaves through the global credit markets. The Dow fell 154 points, with all 30 components down. Only four stocks in the S&P 500 were green on the day. As we noted on Friday morning, however, holiday trading can be exceptionally volatile.
 
The government of Dubai stated that its state-controlled holding company, Dubai World, does not have a financial guarantee from the government and therefore its creditors must deal with the issue. To draw a parallel, this would be like Washington disowning the debt of Fannie Mae and Freddie Mac.

11.24.09
Covestor.com vs. DayTraderHotline.com

Are Covestor and Daytraderhotline.com competitors? Absolutely not! 

"Covestor.com is a site which lets you track the portfolios of thousands of brilliant self-directed investors. You can follow the real trades of other members of the site live, or add your own portfolio to keep better track of your investments. "

Daytraderhotline.com is a site where you can track one "brilliant self-directed investor."

11.24.09
Thanksgiving Rally Continues

It does not pay to get bearish on this market. Not yet, anyway.

The Dow was down just 14 points on Friday, which set the stage for the surprise rally on Monday morning. The dollar weakened about half a percent over the weekend. Since U.S. equities are priced in dollars, the declining greenback creates buying pressure, since shares look cheaper to overseas buyers. We think this trend is likely to continue until the Dollar Index falls to its 2008 low, about 5% lower than Monday's close.

11.20.09
best online stock trader

Becoming one of the best online stock traders began when Independent Investor was founded in 1995 at a kitchen table in West Hartford, Connecticut by Gregory Spear. Mr. Spear had begun to test different investing systems and, in doing so, had invented a revolutionary, yet inherently simple process that worked amazingly well. This system, which he called "Consensus," uncovered stock picks agreed upon by the best performing independent (non-Wall Street) stock analysts and money managers.

11.17.09
New Market Highs

All three major indices set new yearly highs on Monday, which the financial media regards as particularly bullish. One reason is that the S&P 500 has been lagging the pack. With ‘confirmation’ from the S&P, some market technicians are breathing a sigh of relief. Hummmm.

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Blogs
11.10.09
Full Speed Ahead

Yesterday we predicted that the Dow would move very quickly through the 10,000-10,300 zone and most likely overshoot to the upside. So far, so good. Monday’s 200-point move took the Dow up 2% to 10226, its highest finish of the year and its second 200-point up day in the last three trading days. This leaves the index just 28% below its all time high.
10.22.09
Everything is Getting Worse, but Not as Quickly as Before

That’s what passes for good news these days, as Wall Street focuses on how soon growth might return to the economy.

The U.S. economy is losing hundreds of thousands of jobs a month, but that’s not as many as before.
10.01.09
Biotechnology

Unlike the billion-dollar pharmaceutical giants, biotech firms offer the potential for big payoffs. It’s not unusual for a small or mid-sized biotech stock to fluctuate 10%, 20%, 30% or more in a single day after announcing the approval or disapproval of one of its drugs. Biotechnology ETFs offer a way to share in the success of those companies that succeed and limit losses on those that fail.

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Spear's ETF Analyst

10.29.09
Government Bonds

There are three ways to willingly become a creditor of the U.S. government; buy Treasury Bills, buy Treasury Notes, or buy Treasury Bonds.  Treasury Bills, often referred to as T-Bills, are U.S. government debt issued for less than one year.  They are issued at a discount to par, so interest is paid when the principal investment is returned. Treasury Notes are government debt issued with a maturity of 1-10 years and pay interest semi-annually. Treasury Bonds, sometimes called T-Bonds, are U.S. government debt issued with a maturity date of more than 10 years.   T-Bonds also pay interest semi-annually.

10.29.09
Not a Small Fact

During periods of extended market weakness, small caps tend to fare worse than large caps because they have less institutional sponsorship.  We can see this by comparing two ETFs, Direxion’s 3X Small Caps Bull (TNA) and Direxion’s 3X Large Cap Bull (BGU).  With the Dow down 1.21% on Wednesday, Direxion’s small cap ETF lost 9.74%, while the large cap ETF lost 6.09%.  That’s more than a 3.5 point  difference and means small caps lost about 60% more than large caps.  Volume was above average for both funds, with TNA trading 60% more shares than normal and BGU trading 25% more shares than normal.

10.29.09
Still Strong

In Q3 South Korea’s economy grew at the fastest pace in seven years. GDP increased 2.9% and may exceed 5% growth in Q4 due to the improvement in business conditions in China. Capital investment in factories in Korea shot up 8.9% in the third quarter. Accordingly, the South Korean central bank may soon become the second bank in the G20 to raise interest rates.


Market Calls

11.24.09

There is considerable resistance for the Dow in this area due to a cluster of Fibonacci projections and the downtrend line from the October 2007 high. This technical resistance would be expected to act like a brick wall, preventing a further advance in the Dow.
 

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