The Best Way to Read a Chart

Chart reading has been the subject of analysis for almost 100 years. The first book on the subject was likely published in 1930. Richard W. Schabacker published Technical Analysis and Stock Market Profits, that year. It was originally a series of lessons but was in a book form by 1932. Schabacker covered reversal patterns, continuation patterns, trend lines, support and resistance, how to develop price targets from chart patterns and how to trade the patterns. It’s all been explained for many years yet many traders still struggle with charts. Buffett’s View on the Subject May Not Be Right Many investors follow every word ...
Read More
|

Buy This ETF to Trade the Upcoming Crisis in Europe

Europe is no stranger to crisis. It wasn’t that long ago when Greece was at the center of a financial crisis. The country struggled under a heavy debt load and investors were uncertain that Greece could recover. The European Central Bank (ECB) joined with other government agencies and ensured Greece survived. Survival does not mean that Greece’s economy is thriving. It is not. But, Greece is not alone. There are other European countries struggling. Since the crisis that was centered on Greece, analysts have described the most troubled European economies as the PIGS. The PIGS include Portugal, Italy, Greece and Spain. They ...
Read More
|

Using Technical Analysis to Profit from Headlines

Recently, Stitch Fix Inc. (Nasdaq: SFIX) reported earnings and the stock price jumped more than 25% on the news. Traders could benefit from anticipating the news if they are on the right side of a trade like this. In this case, the rewards were significant as the chart below shows. The stock began trading in December and the chart below shows all available trading history. As is typical in many initial public offerings, the stock soared after it began trading. But, of course, they could suffer steep losses if they are on the wrong side of the news. There is no way ...
Read More
|

Marijuana Market About to Enter the Next Phase

Canada is moving rapidly towards the legalization of marijuana. The move comes as leaders of the G-7 nations met in the country. The G-7 are the largest economies in the world and include the United States, Canada, France, Germany, Italy, Japan and the United Kingdom. Canada is on track to be the first of the G-7 countries to legalize marijuana after the Senate recently voted to legalize recreational marijuana. The legislation now heads back to the House of Commons for final action. The move had been widely expected. According to CNBC, “Health Minister Ginette Petitpas Taylor said earlier this year that ...
Read More
|

Cheap Stocks Breaking Out to New Highs

Profits are ultimately one of the drivers of stock prices. This week, we focused on earnings when searching for cheap stocks. We looked for companies that reported profits over the past twelve month period and are expected to report a profit in the current year. We combined this requirement with a low price, requiring the stock to be trading under $5. Many individual investors understand that low priced stocks could be appealing for two reasons. One reason is that the low price means they have little down side risk in dollar terms. The second reason is that low priced stocks are generally ...
Read More
|

How a Trade War Could Affect Your Portfolio

Trade wars seemed unthinkable just a few years ago. Then, the trend was towards globalization. Economists believe this maximizes economic gains around the world. There is an appealing aspect to this theory, tied to the idea that a rising tide lifts all boats. While a rising tide may, in fact, lift all boats, it might not lift all boats by an equal amount. Sticking with the boats analogy for just a moment longer, the rising tide will lift the smallest and lightest boats more than the largest and heaviest boats. In the global economy, the lightest boats are the emerging economies that ...
Read More
|

Hedge Funds Are Buying These Cheap Stocks

Many analysts point to the fact that, as a group, hedge funds tend to deliver average to below average performance. That is true, but that is also not really a relevant fact to most investors. To begin with, remember that there is no requirement to be a hedge fund. Anyone can claim to be a hedge fund and self report performance to the indexing agencies. Regulation is required for larger funds but if an investment manager has few investors, regulations may not apply. That alone explains some of the performance. To some degree, for some participants, starting a hedge fund is like ...
Read More
|

A Look at Value in Facebook, Apple, Amazon, Netflix and Alphabet

Source: Apple.com FAANG is one of the most important stories in the stock market. These companies – Facebook (Nasdaq: FB), Apple (Nasdaq: AAPL), Amazon.com (Nasdaq: AMZN), Netflix (Nasdaq: NFLX) and Alphabet (Nasdaq: GOOGL) (parent of Google) – have been drivers of the stock market for the past few years. This presents a potential problem. This small group of stocks now represents a large part of the stock market. They make up nearly 40% of the Nasdaq 100 index and a large share of other broad indexes as well. Source: Yahoo In the past, when one group of stocks becomes a large part ...
Read More
|