Point and Figure Charts

Traders often look at price charts. Their goal is to identify the direction of the trend. It’s a simple goal, and often a straightforward task to determine whether the trend is up or down. In the chart below, we see the iShares Russell 2000 Index Fund (NYSE: IWM). The trend appears to be breaking out to the upside after months of consolidation. This is one of the most popular charts, drawn in a style known as candlesticks. For a candlestick chart, the range between the opening and closing price is drawn as a rectangle. In the chart above it is colored green if the close is above the ...
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The Best Trades for October

Once again, we are continuing to provide real time buy recommendations for a successful trading strategy at the beginning of the year. Each month, we provide a list of stocks that have historically delivered gains for the next month. It’s time for us to update on this strategy. We are following one of the simplest seasonal trades possible. Few traders follow seasonal strategies although these strategies are often profitable. They are also relatively low risk because they limit market exposure to short periods of time. To apply this strategy, every month we are running a scan to find the ...
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Unlocking MACD

The MACD is one of the most popular technical indicators. It is widely available on a number of free web sites and is frequently shown on charts. But, it might not be well understood. In this article, we’ll take a look at what the indicator is, how it’s used and whether or not it works. Defining MACD Formally, MACD is the Moving Average Convergence-Divergence indicator. It has been available to traders since at least the 1970s when Gerald Appel began writing about it. The indicator is most commonly viewed as a series of bars, like the ones shown below prices in the chart below. MACD i...
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The Cheapest Stocks in the S&P 500

Investors are increasingly worried about a bear market. This is probably almost always true but there are more reasons than usual to worry right now. Valuations are stretched, with many fundamental metrics exceeding levels reached in 2007 and 2000. In addition to the fundamentals, technicals are a cause for concern. Prices have been going up for more than a year without even a 10% pullback. There hasn’t been a 20% pullback in more than 8 years. Pullbacks relieve the excesses that build up over time and are usually considered healthy. Of course, these indicators apply to the stock mar...
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Cheap Insurance Stocks

Insurance stocks are in the spotlight right now. In particular, property and casualty (P&C) insurers are in the spotlight. Property insurance and casualty insurance are types of coverage that help protect the stuff you own — your home or car, for example — and also provide liability coverage to help protect you if you're found legally responsible for an accident that causes injuries to another person or damage to another person's belongings. These are the types of coverage that provide protection against losses like fires, or natural disasters. Home owners affected by Hurricane Harve...
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A Different Look at the Market Provides a Conclusion That Will Scare You

Technical analysts are familiar with breadth indicators. This is a class of indicators designed to measure how broad the participation in a price move is.  The general idea behind breadth indicators is that a healthy trend will have broad participation. In a bull market, for example, most stocks should be in uptrends. This is based on the theory that a market with just narrow leadership is likely to reverse. This was seen in 2000 when just a few stocks were moving higher. These stocks carried a great deal of weight in the indexes and pushed the indexes up. Breadth warned of a problem and th...
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What Harvey Could Mean for Stocks

We are forced to look at history once again. That is a natural response when we are faced with uncertainty. We tend to do this in many parts of our lives. For example, before we go to a family gathering we may recall what happened at previous events and prepare accordingly. On a larger scale, we turn to history when trying to make sense of politics. As a new president is being inaugurated we often look for precedents and compare the modern day with something from the past that we believe to be similar. This gives us at least a sense of security and a baseline for expectations. Although w...
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The Best Trades for September, From a Strategy That’s Beating the Market This Year

As you know, we’ve been providing real time buy recommendations for a successful trading strategy since the beginning of the year. Each month, we provide a list of stocks that have historically delivered gains for the next month. It’s time for us to update on this strategy. We are following one of the simplest seasonal trades possible. Few traders follow seasonal strategies although these strategies are often profitable. They are also relatively low risk because they limit market exposure to short periods of time. To apply this strategy, every month we are running a scan to find the stoc...
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