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The best trade of the day

Posted on 11/26/2008
The best trade for today is refinancing your mortgage.

  • The Federal Reserve unveiled two aggressive efforts Tuesday to free up consumer credit, committing $800 billion to reduce mortgage rates and unfreeze the asset-backed securities market. The impact on mortgage market was huge.
  • Mortgage rates had one of the biggest one day drop. Rates fell from 6.33 to 5.25 for 30 year mortgage in one day. Some brokers were quoting lower than 5% yesterday. It was the biggest one-day drop in at least seven years. Mortgage brokers were ecstatic.
  • If you are on variable rate mortgage it is time to act. But you have to be quick to take advantage of these drops, the mortgage market is volatile so locking in these rates is key. Expect a stampede at mortgage brokers office today.

Print your own money, no kidding

Posted on 11/25/2008

It is perfectly legal as long as you pay Uncle Sam!!


People nationwide may start hoarding their cash as recession fears grow. But in Riverwest—a progressive enclave of Milwaukee—residents have another answer to their money trouble: they'll print their own. The proposed River Currency would be used like cash at local businesses, keeping the area economy humming whatever the health of the country at large. "We can create our own value," explains Sura Faraj, 48, one of the plan's organizers.

It's an attractive idea when times are tight. Communities print what look like ordinary bills with serial numbers, anti-counterfeiting details and images of local landmarks (the Milwaukee River, for instance) instead of presidential portraits. Residents benefit through an exchange system: 10 traditional dollars, for instance, nets them $20 worth of local currency. And when businesses agree to value the funny money like real greenbacks, they also get a free stack to kick-start spending. It's all perfectly legal (except for coins) as long as it's not for profit and the bizarro dinero doesn't resemble the real thing. Dozens of such systems flourished during the Great Depression. In the 1990s, they re-emerged as a way to fight globalization by keeping wealth in local hands. Now the dream of homespun cash is back because it keeps people liquid even if they're unemployed or short on traditional dollars.

Several things conspired for this bounce

  • Markets built on their gains from Friday. These kind of spectacular rallies are key feature of bear markets. The volume was low and the Market Monitor 4% breakout ratio is 852/95, that is very low for such a big bounce.
  • Several things conspired to make this opportune time for the bounce:
    • A big screw up at Citi followed by weekend rescue.
    • Extreme breadth readings on Market monitor from which market reliably rallies.
    • Holiday shortened week.
    • Signs of leadership. Finally Barack Obama emerged out of the rock he was hiding under since his election and the market tanked.
    • A hints of massive 700 billion plus rescue stimulus package.
  • In addition last night news emerged that government would create abank to finance hundreds of billions of dollars in commercial debt, like car loans, student loans and business leases.

Telechart scans for Invest By Knowing What Stocks to Buy and What Stocks to Sell

Posted on 11/24/2008
Some of you have emailed me asking how his "Bargain List" can be done in Telechart. So here is a scan for it in TC.

Beat the Market: Invest by Knowing What Stocks to Buy and What Stocks to Sell

Offers a comprehensive relative strength based trading method with entry, exit and risk management rules. It details a method similar to Modified Double Trouble but adds valuation criteria of Price to sales to it to further narrow down the list. The method can be easily replicated in Telechart.

Kirkpatrick Bargain List In Telechart
In simple words Bargain List is a Relative Strength plus Price/Sales based trading system.
Kirkpatrick Relative Strength
c/avgc126
Create this scan in PCF
This is like MDT scan, only difference is number of days used.
Price to sales ratio is System criteria in Telechart. Look under "Price" below Price Percent Change Today
Capitalization is system criteria and is in millions. So 1=1 million
Easyscan for Kirrkpatrick Bargain List Entry Criteria
Kirkpatrick Relative Strength=>97 (list rank)
Price to Sales Ratio =>17 and =<42>
Capitalization=> 1 million (value)
Price>=10
Exit Rules for this system are
If Kirkpatrick Relative Strength rank =<52
Or
If Price to Sales Ratio Rank=<7
Or
If Price to Sales Ratio Rank =>67
I will have more details on this once I write detailed review of the book.


Are you serious about your trading?

If you are serious about your trading and want to build an enduring edge the Stockbee Member site might help you. Members tell me they have tried lot of things before coming to my site and it has offered them the most extensive and detailed methods to swing and position trade.

It is only for those who want to develop their own self sufficient trading method. It is not a stock picking service. It is service for you to build your own scans and trading method to have your own daily pick based on your method.

Be warned it will take you time to learn to trade. Learning to trade is difficult art and unless you are willing to spend months or years to perfect your strategy and also develop your mental edge you are unlikely to succeed in this game. Unless you understand that no site, no service, and no mentoring is going to work.

Why traders come to stockbee?

The member site is one of the most recommended site for learning to trade by other traders and bloggers. You will see no advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant twits self promoting the site, no free trial  and no tall claims of making you instantly wealthy, and yet the site attracts new  members everyday. Members come from all walks of life and all kinds of trading size and trading styles.

You will see that many trading bloggers have been using my market timing methods, scans , stock ranking lists and chart templates. They have developed their own methods based on my methods. Many paid newsletter site recommend my site to their subscriber for learning about trading and market.

Over the years thousands of traders have been members and those who benefitted from the learning talk about the site to others or talk about the methods used and that is how new members learn about the site.





What will I learn in the members site?

The members site will give you in depth understanding to develop your own trading method. The emphasis is on making you self sufficient and confident of your own trading method and style.

As a member you will learn the basics of swing trading, momentum investing, growth investing and risk management.

You will learn about Stockbee Trend Intensity Breakouts method that uses momentum based swing trading to find 3 to 5 day swing trades for 8 to 40% profit.

You will learn about Stockbee Episodic Pivots Breakout method which uses Post Earnings Announcement Drift (PEAD) to find stocks that had a game changing earnings and that are likely to rally for 3 months to 12 months.

You will learn about  Stockbee Dollar Breakout method that uses momentum, range expansion and swing trading approach to find 5 to 40 dollar moves in high priced stocks.

You will learn about  Stockbee Lemonade Strategy for 401k which uses market timing and momentum to invest in 401k. You will get weekly update on how I am using the strategy on our 401k to do allocation decision.

You will learn about Stockbee Market Monitor method for market timing using breadth. It allows you to avoid risky periods in market and allows you to identify market turns. It is used for 401k allocation decisions.

You will learn about Stockbee Double Trouble method to find stock with confirmed upside momentum using anchored momentum and that are likely to continue their up move.

You will learn about Stockbee Night Time is Right Time method to find news catalyst based trade ideas for short term day trade and swing trade.

You will learn about Investor's Business Daily’s IBD 200 list and how it can be used to find swing trading candidates for explosive moves.

You will learn about Telechart 2000 and how to use it effectively to scan for swing and position trade ideas and to set up your 401k strategy.

You will learn about Jesse Livermore Range Breakout, Darvas Box setup, and many other member shared methods.

You will learn how to setup your own scans, select right kind of stocks, how to setup stops, when to enter , when to exit, how much to risk, how to track your trades and all other details about trading. You will learn about developing your own methods and not relying on others for trade ideas.

The site has hundreds of videos and trading methods and variation of methods. Members help each other in developing the methods and share actively their research and finding. A collaborative spirit allows you to get input from others on your trading ideas or problems.

The site gives you opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different background and experience willing to help each other. The emphasis is on continuous learning and up gradation of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors and new traders.

If you are looking to develop your own trading strategy the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on members site. Every method, every scan, every nuance is detailed and all possible help is offered to design your own method.

Do you have a trial?

If you are just looking for trial you are better off trying thousands of other trading site that offer free trail or one month trial and offer you promise of riches.

It is for those who are ready beyond the trial phase and ready to put serious months or years  of efforts to learn to trade on their own. It is for those who want to learn to find their own fish.

The free blog has all the details about the methods I trade and if you go through the posts highlighted in the sidebar you will learn about them.



How can I become a member?

To sign up go to www.stockbee.biz and follow the sign up process. The site uses Paypal for payment processing.

Economic slowdown does not deter BlackBerry buyers

Posted on 11/21/2008

Things are not so bad! People were lining up to buy the new BlackBerry Storm !!!

Hundreds Wait in line to buy Storm

NEW YORK (Reuters) - Hundreds of people lined up at Verizon Wireless stores on Friday to buy the BlackBerry Storm, the first touch-screen phone from Research In Motion that aims to compete with Apple's iPhone.

More than 200 people had waited at a Verizon store in mid-town Manhattan early in the morning, many of whom were turned away after it ran out of the new phones less than an hour after opening at 8 a.m. The angry customers caused a ruckus and police came to restore order.

Verizon said hundreds of others were in lines outside its stores up and down the U.S. east coast, but added that it had "plenty of phones" and would keep getting more shipments. It declined to give specifics on inventory levels.

Faber expects a bounce

The sheer amount of money governments are pumping into the financial system will eventually lead to a very strong rally in beaten-down assets, investor Marc Faber said on CNBC Friday.

But Faber also warned that if the markets remain depressed as liquidity increases the result could be a depression worse than in 1929.

By and large asset markets are "terribly oversold" now, while investors are going overboard into the U.S. dollar and U.S. Treasurys, Faber, editor of the Gloom, Boom & Doom Report, told "Squawk Box Europe."

"What you could see in the next three months is a very strong rebound in asset markets, in equities, followed by a selloff in bonds and eventually a selloff in the dollar," he said.

Governments and central banks around the world are providing liquidity and that will eventually have an impact, Faber said.

And once the buying starts the rally is likely to be "stronger than people expect" given that financial institutions are sitting on so much cash, he added.

Whichever way you look at it, there is a very strong possibility of mother of all bounces. In the greatest bear market of 1929 to 1933, that rebound was 40% plus. Ultimately it failed but a rebound like that should be considered a possibility.

No panic yet

Posted on 11/20/2008


Global Stocks, U.S. Index Futures Fall; Yen, Treasuries Rally

By Sarah Thompson

Nov. 20 (Bloomberg) -- Stocks slumped, sending the MSCI World Index to the lowest level since 2003, on concern bank losses will increase and corporate profits will crumble as the recession spreads. U.S. index futures dropped, while Treasuries and the yen rallied as investors shunned riskier assets.

UBS AG and ING Groep NV dropped more than 7 percent after Citigroup Inc.'s plan to buy troubled investment-fund assets fueled speculation of more bank writedowns. Copper declined for a third day and oil slid toward $50 a barrel, sending commodity producers lower. Treasuries rose, pushing two-year note yields to a record low as investors sought the safety of government bonds.

The MSCI World Index lost 2.2 percent to 803.37, the lowest since April 2003, at 10:33 a.m. in London. The MSCI Emerging Markets Index tumbled 4.7 percent, with Russia's Micex Index sliding as much as 9 percent before trading was interrupted for an hour.

``We're seeing a total collapse of trust in everything fundamental,'' said Espen Furnes, an Oslo-based fund manager at Storebrand Asset Management, which has the equivalent of $48 billion. ``There are no buyers in sight. This year will go down in history.''

More than $32 trillion has been erased from the value of global equities this year as the financial-market turmoil pushes countries from Europe to the U.S. and Japan into recession.

Europe's Dow Jones Stoxx 600 Index declined 3.3 percent. Standard & Poor's 500 Index futures lost 1.8 percent, while the MSCI Asia Pacific Index slid 5.1 percent.

  • Markets are gearing up for more bad news. The Fed meeting minutes painted a bleak picture. So by end of day all index were down 5% plus with DJ leading the downside.
  • That has the Market Monitor reading diving down to 411/ 3924 levels. That 411 is what I am watching for further drop to put in a trade.
  • So far it has been steady drip drip selling, panic is yet to set in. When panic sets in then there are short term opportunities.

For a change positive day

Posted on 11/19/2008
  • Index end positive for a change. HPQ earnings triggered a turnaround in futures and after a sideways day the Index managed to end positive on high volume. If you look at the positive days on Index, they have been on high volume. Negative days on low volume.
  • However if you look at Market Monitor breakout ratio it is at 251/608. So selling was dominating.
  • At this stage the market lacks a catalyst to get moving in either direction. Currently we have a lame duck govt. The TARP experiment has been halted till next admin comes in. There is now bailout fatigue and frankly everyone is asking for it. Non bank companies are buying banks to getpart of money.
  • But typically week leading in to Thanksgiving holiday tend to be bullish. So we might have another attempt at one or 2 day bounce.

Some books for your Christmas buy list

Posted on 11/18/2008
Four books I would recommend from the books published in 2007-2008. While there are many books published in a year, these four books have ideas, methods or trading systems which can make you money.
Beat the Market: Invest by Knowing What Stocks to Buy and What Stocks to Sell



Offers a comprehensive relative strength based trading method with entry, exit and risk management rules. It details a method similar to Modified Double Trouble but adds valuation criteria of price to sales to it to further narrow down the list. The method can be easily replicated in Telechart. It has a complete ready to use trading method which you a very focused list and it outperforms S&P.
This is my number one pick.

Smarter Investing in Any Economy: The Definitive Guide to Relative Strength Investing



The book as name suggest goes in to details about using Relative Strength to design a trading strategy. Relative strength based strategies are one of the ways to exploit the momentum anomaly. Relative strength strategies aim to find strongest or weakest stocks, ETFs, or sectors in any market environment and to trade them on long or short side till they maintain there relative strength. Well formulated relative strength based strategies keep you on the right side of market.
The book goes in to details of various ways to rank stocks. Formulas for calculating relative strength using absolute difference, normalised ROC, moving averages, front or back weighted ROC, and standard deviation are detailed.
In the next section the author demonstrates ways to build trading strategy using Relative strength. He goes in to issues like:
  • What vehicles to buy using Relative Strength
  • What time frames for relative strength are ideal
  • When should you buy and sell
  • How should you manage your risk
The author provides a researched strategy using the relative strength. Various application of relative strength for stocks, etf, mutual funds and futures are discussed , to provide further ideas for investors.
Some of the most successful trading methods in the market are based on relative strength . It is one of the proven methods in the market that works. This book provides a good guide to investors interested in learning and applying about relative strength based strategies.
The book certainly is not "The Definitive Guide to Relative Strength Investing " because it is very narrowly focused on one trading system application of relative strength. It could have done a much better job of illustrating many more relative strength based approaches. The first chapter in the book is the worst, it never defines relative strength properly and spends more time trying to repudiate momentum investing, when in fact the entire rational of relative strength investing is based on stock momentum.
In spite of some reservations, this is one of the best books out of 70-80 books on trading I have read so far this year. I highly recommend this book because it contains ideas and concept which can make you money.


Way of the Turtle: The Secret Methods that Turned Ordinary People into Legendary Traders: The Secret Methods that Turned Ordinary People into Legendary Traders


Best book laying out systematic way to build a trading system. A comprehensive discussion of issues involved and possible solutions in system building and testing. A book primarily for system traders.



Your Next Great Stock: How to Screen the Market for Tomorrow's Top Performers


The author details ways to screen for stock likely to move using various researched anomalies. There are many profitable ideas in this book. They are not completely fleshed out but if you think through them, you can easily replicate them and build complete strategies around them.



Are you serious about your trading?

If you are serious about your trading and want to build an enduring edge the Stockbee Member site might help you. Members tell me they have tried lot of things before coming to my site and it has offered them the most extensive and detailed methods to swing and position trade.

It is only for those who want to develop their own self sufficient trading method. It is not a stock picking service. It is service for you to build your own scans and trading method to have your own daily pick based on your method.

Be warned it will take you time to learn to trade. Learning to trade is difficult art and unless you are willing to spend months or years to perfect your strategy and also develop your mental edge you are unlikely to succeed in this game. Unless you understand that no site, no service, and no mentoring is going to work.

Why traders come to stockbee?

The member site is one of the most recommended site for learning to trade by other traders and bloggers. You will see no advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant twits self promoting the site, no free trial  and no tall claims of making you instantly wealthy, and yet the site attracts new  members everyday. Members come from all walks of life and all kinds of trading size and trading styles.

You will see that many trading bloggers have been using my market timing methods, scans , stock ranking lists and chart templates. They have developed their own methods based on my methods. Many paid newsletter site recommend my site to their subscriber for learning about trading and market.

Over the years thousands of traders have been members and those who benefited from the learning talk about the site to others or talk about the methods used and that is how new members learn about the site.





What will I learn in the members site?

The members site will give you in depth understanding to develop your own trading method. The emphasis is on making you self sufficient and confident of your own trading method and style.

As a member you will learn the basics of swing trading, momentum investing, growth investing and risk management.

You will learn about Stockbee Trend Intensity Breakouts method that uses momentum based swing trading to find 3 to 5 day swing trades for 8 to 40% profit.

You will learn about Stockbee Episodic Pivots Breakout method which uses Post Earnings Announcement Drift (PEAD) to find stocks that had a game changing earnings and that are likely to rally for 3 months to 12 months.

You will learn about  Stockbee Dollar Breakout method that uses momentum, range expansion and swing trading approach to find 5 to 40 dollar moves in high priced stocks.

You will learn about  Stockbee Lemonade Strategy for 401k which uses market timing and momentum to invest in 401k. You will get weekly update on how I am using the strategy on our 401k to do allocation decision.

You will learn about Stockbee Market Monitor method for market timing using breadth. It allows you to avoid risky periods in market and allows you to identify market turns. It is used for 401k allocation decisions.

You will learn about Stockbee Double Trouble method to find stock with confirmed upside momentum using anchored momentum and that are likely to continue their up move.

You will learn about Stockbee Night Time is Right Time method to find news catalyst based trade ideas for short term day trade and swing trade.

You will learn about Investor's Business Daily’s IBD 200 list and how it can be used to find swing trading candidates for explosive moves.

You will learn about Telechart 2000 and how to use it effectively to scan for swing and position trade ideas and to set up your 401k strategy.

You will learn about Jesse Livermore Range Breakout, Darvas Box setup, and many other member shared methods.

You will learn how to set up your own scans, select right kind of stocks, how to set up stops, when to enter , when to exit, how much to risk, how to track your trades and all other details about trading. You will learn about developing your own methods and not relying on others for trade ideas.

The site has hundreds of videos and trading methods and variation of methods. Members help each other in developing the methods and share actively their research and finding. A collaborative spirit allows you to get input from others on your trading ideas or problems.

The site gives you opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different background and experience willing to help each other. The emphasis is on continuous learning and up gradation of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors and new traders.

If you are looking to develop your own trading strategy the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on members site. Every method, every scan, every nuance is detailed and all possible help is offered to design your own method.

Do you have a trial?

If you are just looking for trial you are better off trying thousands of other trading site that offer free trial or one month trial and offer you promise of riches.

It is for those who are ready beyond the trial phase and ready to put serious months or years  of efforts to learn to trade on their own. It is for those who want to learn to find their own fish.

The free blog has all the details about the methods I trade and if you go through the posts highlighted in the sidebar you will learn about them.



How can I become a member?

To sign up go to www.stockbee.biz and follow the sign up process. The site uses Paypal for payment processing.

Are you an idiot to keep paying your mortgage?

Posted on 11/17/2008
If you do not have significant equity in your home, there is no need to pay your mortgage. That is the message from government and lenders. Bad decision and bad behavior is being rewarded currently.

Peter Schiff, president of Euro Pacific Capital, predicts that many homeowners who have little or no equity will stop paying their mortgage and then reduce their income to get the biggest payment cut possible. They could stop working overtime or, if two spouses work, one could quit. After the modification, they could try to boost their income again.

"This is a once-in-a-lifetime opportunity," Schiff says. "People are going to feel like complete morons if they don't participate. The people getting punished are the ones who never made an irresponsible decision to buy a house they couldn't afford."

The government is offering loan servicers $800 for every homeowner they get into the plan.

Schiff predicts that loan agents "will be cold-calling people trying to get them into it. Just like they encouraged people to overstate their income to get a bigger loan in the first place, now they will encourage them to understate their income to qualify for a smaller loan."

Hedge funds move to cash

``Movements in financial markets were so volatile, so unpredictable and so seemingly detached from fundamentals'' that many hedge-fund managers ``didn't feel they had an edge,'' said Doug Peta, an independent market strategist in New York. ``The best thing they could do for their investors was to pull back entirely until markets returned to more of a sense of normalcy.''

That pretty much says all about this market. Day to day moves as well as intra day moves are very volatile. Friday was perfect example of that. In last half an hour or so we had 400 point move to downside.
At this stage the market is rage bound and after the October10th reversal, it has essentially traded in a wide range. However that low has held. In the meanwhile everyday truckload of bad news is released. The question is how much of the bad news is priced in at this level. Fresh bad news has had no major impact on the market. Which is bullish.

DeMak Indicators By Jason Perl

Posted on 11/14/2008

DeMark Indicators (Bloomberg Market Essentials: Technical Analysis)


This is a new book which hit the market just last month. It goes in to details about DeMark trading methods.Tom DeMark method is basically based on identifying buying and selling zones. He uses price exhaustion to identify such zones. TD Sequential and TD Combo are the two best known methods for this. They identify countertrend entry points and beauty of the methods is they give you a low risk entry in to possible start of a new trend. He has a wide following and Paul Tudor Jones is rumored to be great fan of his methods.
Tom DeMark wrote two books about his methods:

  1. The New Science Of Technical Analysis
  2. New Market Timing Techniques

While his method are logical and make great intuitive sense, they are difficult to interpret and his writing is not very clear. This new book explains his methods in greater details and offers some more pointers to making them work. While the book is vast improvement over DeMark own books, it is still not very clear. But for those interested in DeMark methods, this book is welcome new addition.

Wall Street Lays Another Egg

Posted on 11/13/2008

Vanity Fair looks at what went wrong in the market. A long and interesting history of this crisis. There is currently a bull market in such analysis.

This year we have lived through something more than a financial crisis. We have witnessed the death of a planet. Call it Planet Finance. Two years ago, in 2006, the measured economic output of the entire world was worth around $48.6 trillion. The total market capitalization of the world’s stock markets was $50.6 trillion, 4 percent larger. The total value of domestic and international bonds was $67.9 trillion, 40 percent larger. Planet Finance was beginning to dwarf Planet Earth.

Planet Finance seemed to spin faster, too. Every day $3.1 trillion changed hands on foreign-exchange markets. Every month $5.8 trillion changed hands on global stock markets. And all the time new financial life-forms were evolving. The total annual issuance of mortgage-backed securities, including fancy new “collateralized debt obligations” (C.D.O.’s), rose to more than $1 trillion. The volume of “derivatives”—contracts such as options and swaps—grew even faster, so that by the end of 2006 their notional value was just over $400 trillion. Before the 1980s, such things were virtually unknown. In the space of a few years their populations exploded. On Planet Finance, the securities outnumbered the people; the transactions outnumbered the relationships.

New institutions also proliferated. In 1990 there were just 610 hedge funds, with $38.9 billion under management. At the end of 2006 there were 9,462, with $1.5 trillion under management. Private-equity partnerships also went forth and multiplied. Banks, meanwhile, set up a host of “conduits” and “structured investment vehicles” (sivs—surely the most apt acronym in financial history) to keep potentially risky assets off their balance sheets. It was as if an entire shadow banking system had come into being.

Then, beginning in the summer of 2007, Planet Finance began to self-destruct in what the International Monetary Fund soon acknowledged to be “the largest financial shock since the Great Depression.”

Selling persists

  • Selling persists and the 4% breakout ratio yesterday was 56/1665
  • The ratio of number of stocks up or down 25% plus in a quarter is at 639/3795. At current selling rate we would be again in below 200 territory by weekend or possibly today.
  • Market in last 6 session has lost over 15%, which many times is the loss in a year. So these are extra ordinary circumstances. 3% plus and minus moves are daily occurrences while earlier a move of 1.5% in Index was considered significant.

Analyst target for GM=$0

Posted on 11/10/2008
This must be first of its kind.

Deutsche Bank downgraded General Motors Corp.GM 3.60, -0.76, -17.4%) to sell from hold, with a price target of $0, saying the car maker may not be able to fund its U.S. operations beyond December without government intervention. Deutsche Bank said it believes the U.S. government will be compelled to intervene through a capital infusion or loan, but even if GM avoids bankruptcy, equity shareholders are unlikely to get anything back, it added.

Grand Canyon Education to IPO this month

The Education and Training Services sub sector is currently one of the leading sector by relative strength. Grand Canyon Education is planning an IPO this month. This will be an IPO to watch.

Online college Grand Canyon Education Inc. is planning its initial public offering later this month, in a deal that would mark the end of a nearly four-month IPO drought in the U.S.

The deal is set to price the week of Nov. 17, according to underwriters. Arizona-based Grand Canyon Education filed for its IPO in May, and set a share size and price range at the end of September. But it didn't select a date to launch the deal as October led to steadily deteriorating broad market conditions.

The company plans to sell 10.5 million shares at a price between $16 and $18, $2 lower than originally planned, and will list on the Nasdaq Stock Market under the symbol "LOPE." Credit Suisse Group and Merrill Lynch & Co. are the lead underwriters. The deal is expected to begin trading Nov. 20.

The 140 billion dollar "Wells Fargo Ruling"

This story in Washington Post is really stunning and outrageous. A 140 billion tax give away to banks, which is illegal . Tax payers money at work.

The financial world was fixated on Capitol Hill as Congress battled over the Bush administration's request for a $700 billion bailout of the banking industry. In the midst of this late-September drama, the Treasury Department issued a five-sentence notice that attracted almost no public attention.

But corporate tax lawyers quickly realized the enormous implications of the document: Administration officials had just given American banks a windfall of as much as $140 billion.

The sweeping change to two decades of tax policy escaped the notice of lawmakers for several days, as they remained consumed with the controversial bailout bill. When they found out, some legislators were furious. Some congressional staff members have privately concluded that the notice was illegal. But they have worried that saying so publicly could unravel several recent bank mergers made possible by the change and send the economy into an even deeper tailspin.

"Did the Treasury Department have the authority to do this? I think almost every tax expert would agree that the answer is no," said George K. Yin, the former chief of staff of the Joint Committee on Taxation, the nonpartisan congressional authority on taxes. "They basically repealed a 22-year-old law that Congress passed as a backdoor way of providing aid to banks."

A 21 day range

  • In the last 21 days market has formed a range. The heavy selling which preceded the range has subsided. However selective selling in sectors continues.
  • At current stage as market was in downtrend mean reversion kind of moves are dominating and trading methods based on that are working.
  • Momentum based methods have low success rate currently.
  • Economic reports and news are primary drivers of overall market direction. Stock specific news like earnings and guidance have had low success rate on bullish side currently.
  • Today the news of Chinese stimulus package will be the dominant theme.

Leveraged ETF

Posted on 11/06/2008

If two times leverage is good, is three times better?

That is apparently what Direxion Funds is banking on as it lists exchange-traded funds that provide 300% leverage to market indexes on both the long and short sides.

Though these new ETFs give investors more bang for their buck, they should end up being extremely volatile, with the potential to deliver both huge gains and losses in relatively short periods. Investment managers ProShares and Rydex Investments sponsor ETFs that provide 200% leverage to markets, but the Direxion products are the first to use 3-to-1 leverage.

The first batch of eight bullish and bearish funds from Boston-based Direxion offers "an unprecedented level of leverage in the ETF arena," the company said.

Four of them listed Wednesday on the New York Stock Exchange's NYSE Arca platform and the rest are scheduled to launch Thursday. The ETFs launched Wednesday have net annual operating expenses of 0.95% and Thursday's have 0.94%.


ETF were supposed to overcome the problem of equity selection, but it is now coming full circle as more and more ETF are being launched. A simple strategy has become complex. ETF were supposed to be simple solution to the problem of equity selection.

5 years ago you had like 100 ETF out of which those with sufficient trading volume were around 25. Today you have 700 ETF.

At the end of the day more choice produces same problem as in stocks. Once the universe of available ETF increases, you again need to use some vehicle selection strategy to narrow down the focus. What criteria one uses for vehicle selection becomes more critical. Obviously one of the ways to manage the growing universe of ETF's is by using relative strength.



Top 20 sectors

Posted on 11/05/2008
Educational services. Airlines and Home Health Care are currently the top 3 sectors. Regional banks are bouncing back after the meltdown in financial sector.
The top 200 stocks by relative strength offer a broader view of leading stocks and shows what kind of stocks the market is currently favoring.

AAI,Airtran Hldg (Google Yahoo Earnings Chart)
ADY,American Dairy Inc (Google Yahoo Earnings Chart)
AFAM,Almost Family Inc (Google Yahoo Earnings Chart)
AGA,DB Agriculture Double Short ETN (Google Yahoo Earnings Chart)
AGP,Amerigroup (Google Yahoo Earnings Chart)
AHG,Apria Healthcare Group (Google Yahoo Earnings Chart)
ALGT,Allegiant Travel Co (Google Yahoo Earnings Chart)
ALK,Alaska Air Group Inc (Google Yahoo Earnings Chart)
ALO,Alpharma Inc (Google Yahoo Earnings Chart)
AMGN,Amgen Inc (Google Yahoo Earnings Chart)
AMR,Amr Corporation (Google Yahoo Earnings Chart)
ANCI,American CareSource Holdings Inc. (Google Yahoo Earnings Chart)
ANEN,Anaren Inc (Google Yahoo Earnings Chart)
APEI,American Public Education` Inc (Google Yahoo Earnings Chart)
APOL,Apollo Group Inc Cl A (Google Yahoo Earnings Chart)
APSG,Applied Signal Tech Inc (Google Yahoo Earnings Chart)
ARDNA,Arden Group Cl A (Google Yahoo Earnings Chart)
AROW,Arrow Financial Corp (Google Yahoo Earnings Chart)
ASEI,American Science & Engineering Inc (Google Yahoo Earnings Chart)
ASTM,Aastrom Biosciences Inc (Google Yahoo Earnings Chart)
ATLO,Ames National Corporation (Google Yahoo Earnings Chart)
ATML,Atmel Corp (Google Yahoo Earnings Chart)
AVAV,Aerovironment Inc (Google Yahoo Earnings Chart)
AXYS,Axsys Technologies (Google Yahoo Earnings Chart)
BBT,Bb&T Corp (Google Yahoo Earnings Chart)
BRKL,Brookline Bancorp Inc (Google Yahoo Earnings Chart)
BRL,Barr Laboratories Inc (Google Yahoo Earnings Chart)
BRO,Brown & Brown (Google Yahoo Earnings Chart)
BSRR,Sierra Bancorp (Google Yahoo Earnings Chart)
BTFG,Banctrust Financial Group Inc (Google Yahoo Earnings Chart)
BUSE,First Busey Corp Cl A (Google Yahoo Earnings Chart)
CACB,Cascade Bancorp (Google Yahoo Earnings Chart)
CAL,Continental Airlines B (Google Yahoo Earnings Chart)
CAPA,Captaris Inc (Google Yahoo Earnings Chart)
CASY,Casey's General Stores (Google Yahoo Earnings Chart)
CATY,Cathay General Bancorp (Google Yahoo Earnings Chart)
CBST,Cubist Pharmaceuticals (Google Yahoo Earnings Chart)
CFFN,Capitol Federal Fncl (Google Yahoo Earnings Chart)
CHE,Chemed Corp (Google Yahoo Earnings Chart)
CIA,Citizens Inc (Google Yahoo Earnings Chart)
CLMT,Calumet Specialty Products Partners (Google Yahoo Earnings Chart)
COBZ,Cobiz Ixstorm.com Inc New (Google Yahoo Earnings Chart)
COMS,3Com Corp (Google Yahoo Earnings Chart)
CPF,Central Pacific Finl Corp (Google Yahoo Earnings Chart)
CPSI,Computer Programs & Systems (Google Yahoo Earnings Chart)
CRD.B,Crawford & Co B (Google Yahoo Earnings Chart)
CRI,Carter Holdings Inc (Google Yahoo Earnings Chart)
CSFL,Centerstate Banks Of Florida (Google Yahoo Earnings Chart)
CVBF,Cvb Financial Corp (Google Yahoo Earnings Chart)
CZNC,Citizens & Northern Corp (Google Yahoo Earnings Chart)
DAL,Delta Air Lines Inc (Google Yahoo Earnings Chart)
DGII,Digi International Inc (Google Yahoo Earnings Chart)
DMND,Diamond Foods Inc (Google Yahoo Earnings Chart)
DZZ,DB Gold Double Short ETN (Google Yahoo Earnings Chart)
EBS,Emergent BioSolutions Inc (Google Yahoo Earnings Chart)
EFU,Ultrshrt Msci Eafe (Google Yahoo Earnings Chart)
EFZ,Short Msci Eafe (Google Yahoo Earnings Chart)
EGLT,Eagle Test Systems Inc (Google Yahoo Earnings Chart)
EMS,Emergency Medical Services L.P. (Google Yahoo Earnings Chart)
ENSG,Ensign Group (Google Yahoo Earnings Chart)
EWBC,East West Bancorp Inc (Google Yahoo Earnings Chart)
FBCM,Fbr Capital Markets Corp (Google Yahoo Earnings Chart)
FBNC,First Bancorp Nc (Google Yahoo Earnings Chart)
FBP,First Bancorp Holding Co (Google Yahoo Earnings Chart)
FDO,Family Dollar Stores Inc (Google Yahoo Earnings Chart)
FFBC,First Financl BAncorp Oh (Google Yahoo Earnings Chart)
FFIN,First Financial Bankshrs (Google Yahoo Earnings Chart)
FHN,First Horizon Natl (Google Yahoo Earnings Chart)
FMER,Firstmerit Corp (Google Yahoo Earnings Chart)
FNFG,First Niagara Finl Grp Inc New (Google Yahoo Earnings Chart)
GEHL,Gehl Co (Google Yahoo Earnings Chart)
GERN,Geron Corporation (Google Yahoo Earnings Chart)
GHL,Greenhill & Co (Google Yahoo Earnings Chart)
GNLB,Genelabs Technologies (Google Yahoo Earnings Chart)
GTIV,Gentiva Health Svcs (Google Yahoo Earnings Chart)
GXDX,Genoptix (Google Yahoo Earnings Chart)
HBAN,Huntington Bancshares (Google Yahoo Earnings Chart)
HTBK,Heritage Commerce Corp (Google Yahoo Earnings Chart)
ICUI,Icu Medical Inc (Google Yahoo Earnings Chart)
IKN,Ikon Office Solutions (Google Yahoo Earnings Chart)
IMCL,Imclone Systems Inc (Google Yahoo Earnings Chart)
ISYS,Integral Systems Inc (Google Yahoo Earnings Chart)
ITWO,i2 Technologies Inc (Google Yahoo Earnings Chart)
JBLU,Jetblue Airways Corp (Google Yahoo Earnings Chart)
LCC,US Airways Group Inc (Google Yahoo Earnings Chart)
LDG,Longs Drug Stores Inc (Google Yahoo Earnings Chart)
LG,Laclede Gas Co (Google Yahoo Earnings Chart)
LHCG,LHC Group (Google Yahoo Earnings Chart)
LNDC,Landec Corporation (Google Yahoo Earnings Chart)
LPHI,Life Partners Inc (Google Yahoo Earnings Chart)
LRN,K12 Inc. (Google Yahoo Earnings Chart)
MBI,Mbia Inc (Google Yahoo Earnings Chart)
MITI,Micromet Inc (Google Yahoo Earnings Chart)
MYGN,Myriad Genetics Inc (Google Yahoo Earnings Chart)
MYY,Proshrs Short Midcap400 (Google Yahoo Earnings Chart)
MZZ,ProShares UltraShort MidCap400 ETF (Google Yahoo Earnings Chart)
NAPS,Napster Inc (Google Yahoo Earnings Chart)
NBTB,Nbt Bancorp Inc (Google Yahoo Earnings Chart)
NDN,99 Cents Only Stores (Google Yahoo Earnings Chart)
NKTR,Nektar Therapeutics (Google Yahoo Earnings Chart)
NL,Nl Industries Inc (Google Yahoo Earnings Chart)
NPBC,National Penn Bancshares Inc (Google Yahoo Earnings Chart)
NPSP,Nps Pharmaceuticals Inc (Google Yahoo Earnings Chart)
NWA,NorthWest Airlines Corporation (Google Yahoo Earnings Chart)
ONB,Old National Bancorp In (Google Yahoo Earnings Chart)
OPNT,Opnet Technologies Inc (Google Yahoo Earnings Chart)
OZRK,Bank Of The Ozarks Inc (Google Yahoo Earnings Chart)
PACW,PacWest Bancorp (Google Yahoo Earnings Chart)
PBKS,Provident Bankshares Cp (Google Yahoo Earnings Chart)
PCBC,Pacific Capital Bancorp (Google Yahoo Earnings Chart)
PETS,PetMed Express Inc (Google Yahoo Earnings Chart)
PGC,Peapack-Gladstone Fnl (Google Yahoo Earnings Chart)
PHLY,Philadelphia Consolidated Holding Corp (Google Yahoo Earnings Chart)
PJC,Piper Jaffray Companies (Google Yahoo Earnings Chart)
PNFP,Pinnacle Finacial Partners (Google Yahoo Earnings Chart)
PNY,Piedmont Natrl Gas Inc (Google Yahoo Earnings Chart)
PRK,Park National Corp (Google Yahoo Earnings Chart)
PSPT,Peoplesupport Inc (Google Yahoo Earnings Chart)
PSQ,Proshrs Short Qqq (Google Yahoo Earnings Chart)
PTRY,Pantry Inc (Google Yahoo Earnings Chart)
PVTB,Privatebancorp Inc (Google Yahoo Earnings Chart)
QCOR,Questcor Pharmaceuticals (Google Yahoo Earnings Chart)
QID,Proshrs Ultrashort Qqq (Google Yahoo Earnings Chart)
QSII,Quality Systems Inc (Google Yahoo Earnings Chart)
RAH,Ralcorp Holdings Inc (Google Yahoo Earnings Chart)
REV,Revlon Inc (Google Yahoo Earnings Chart)
REW,Proshrs Ultrashort Technology (Google Yahoo Earnings Chart)
RJET,Republic Airways (Google Yahoo Earnings Chart)
RMS,Rydex Inverse 2x S&P MidCap 400 ETF (Google Yahoo Earnings Chart)
RRZ,Rydex Inverse 2x Russell 2000 ETF (Google Yahoo Earnings Chart)
RSW,Rydex Inverse 2x S&P 500 ETF (Google Yahoo Earnings Chart)
RWM,Proshrs Short Russell2000 (Google Yahoo Earnings Chart)
RXII,RXi Pharmaceuticals Corporation (Google Yahoo Earnings Chart)
SBB,Proshres Short Smallcap600 (Google Yahoo Earnings Chart)
SBNY,Signature Bank (Google Yahoo Earnings Chart)
SBSI,Southside Bancshares Inc (Google Yahoo Earnings Chart)
SCC,Proshr Ultrashrt Consumer Svs (Google Yahoo Earnings Chart)
SCRX,Sciele Pharma Inc (Google Yahoo Earnings Chart)
SCUR,Secure Computing Cp (Google Yahoo Earnings Chart)
SDD,Proshr Ultrashort Smallcap600 (Google Yahoo Earnings Chart)
SDK,Proshrs Ultrasht Russ Midcp Gw (Google Yahoo Earnings Chart)
SDP,Proshrs Ulstrshrt Utilities (Google Yahoo Earnings Chart)
SDS,Proshrs Ultrshrt S&P500 (Google Yahoo Earnings Chart)
SF,Stifel Financial Corp (Google Yahoo Earnings Chart)
SFK,ProShares UltraShort Russell 1000 Growth (Google Yahoo Earnings Chart)
SH,ProShares Short S&P500 ETF (Google Yahoo Earnings Chart)
SHEN,Shenandoah Telecomm (Google Yahoo Earnings Chart)
SIJ,Proshr Ultrashort Industrials (Google Yahoo Earnings Chart)
SINT,Si International (Google Yahoo Earnings Chart)
SJF,ProShares UltraShort Russell 1000 Value (Google Yahoo Earnings Chart)
SJL,Proshrs Ultrasht Rus Midcp Val (Google Yahoo Earnings Chart)
SKK,Proshrs Ultrshrt Russ2000 Gwth (Google Yahoo Earnings Chart)
SLXP,Salix Pharmaceuticals Ltd (Google Yahoo Earnings Chart)
SMG,Scotts Miracle-Gro Company (Google Yahoo Earnings Chart)
SMN,Proshr Ultrshrt Basic Material (Google Yahoo Earnings Chart)
SPTN,Spartan Stores Inc (Google Yahoo Earnings Chart)
SQNM,Sequenom Inc (Google Yahoo Earnings Chart)
SRS,Proshrs Ultrshrt Real Estate (Google Yahoo Earnings Chart)
SRVY,Greenfield Online Inc (Google Yahoo Earnings Chart)
SSG,Proshrs Ultrshrt Semiconductor (Google Yahoo Earnings Chart)
STEM,Stemcells Inc (Google Yahoo Earnings Chart)
STSI,Star Scientific Inc. (Google Yahoo Earnings Chart)
SURW,Sure West Communications (Google Yahoo Earnings Chart)
SUSS,Susser Hldgs (Google Yahoo Earnings Chart)
SXI,Standex Internat Corp (Google Yahoo Earnings Chart)
SZK,Proshares Ultra Short Comsumer Goods (Google Yahoo Earnings Chart)
TCB,Tcf Financial Corp (Google Yahoo Earnings Chart)
TCBK,Trico Bancshares (Google Yahoo Earnings Chart)
TCL,Tata Communication Ltd (Google Yahoo Earnings Chart)
THFF,First Financial Corp In (Google Yahoo Earnings Chart)
THOR,Thoratec Corporation (Google Yahoo Earnings Chart)
TLL,Proshares Ultrashort Teleco (Google Yahoo Earnings Chart)
TMTA,Transmeta Corporation (Google Yahoo Earnings Chart)
TOWN,Townebank (Va) (Google Yahoo Earnings Chart)
TRCA,Tercica (Google Yahoo Earnings Chart)
TRMK,Trustmark Corp (Google Yahoo Earnings Chart)
TRST,Trustco Bank Corp Ny (Google Yahoo Earnings Chart)
TSCO,Tractor Supply Co (Google Yahoo Earnings Chart)
TWM,Proshr Ultrashort Russell2000 (Google Yahoo Earnings Chart)
TWP,Trex Co Inc (Google Yahoo Earnings Chart)
UAUA,UAL Corp (Google Yahoo Earnings Chart)
UB,Unionbancal Corporation (Google Yahoo Earnings Chart)
UBNK,United Financial Bancorp Inc (Google Yahoo Earnings Chart)
UBSH,Union Bankshares Cp Co (Google Yahoo Earnings Chart)
UBSI,United Bankshares Inc Wv (Google Yahoo Earnings Chart)
UCBI,United Community Banks (Google Yahoo Earnings Chart)
UFI,Unifi Inc (Google Yahoo Earnings Chart)
UMPQ,Umpqua Holdings Corp (Google Yahoo Earnings Chart)
UST,Ust Inc (Google Yahoo Earnings Chart)
UTI,Universal Technical Institute (Google Yahoo Earnings Chart)
UVSP,Univest Corp Pennsylvania (Google Yahoo Earnings Chart)
VASC,Vascular Solutions Inc (Google Yahoo Earnings Chart)
VITA,Orthovita Inc (Google Yahoo Earnings Chart)
VITL,Vital Signs Inc (Google Yahoo Earnings Chart)
VLGEA,Village Super Market A (Google Yahoo Earnings Chart)
VPHM,Viropharma Inc (Google Yahoo Earnings Chart)
WAL,Western Alliance Bancorporation (Google Yahoo Earnings Chart)
WFC,Wells Fargo & Co New (Google Yahoo Earnings Chart)
WMAR,West Marine Inc (Google Yahoo Earnings Chart)
WSBC,Wesbanco Inc (Google Yahoo Earnings Chart)
ZION,Zions Bancorporation (Google Yahoo Earnings Chart)



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