Apple’s Chart Flashes Important Signals for 2019

Apple (Nasdaq: AAPL) ended the year in an interesting position. Its stock was in a down trend. This reverses a long standing up trend in the stock. Recent lows, marked with a horizontal blue line in the chart, should offer support. But a break below that level could lead to a sharp sell off since that is an important and obvious technical support level on the chart. A break of that line could push the stock towards $100 a share, a price level that sounds impossible but could be within the realm of possibility in a bear market. Analysts expect the company to report earnings ...
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Are Your Charts Hiding Profits From You?

Charts can provide plenty of profitable trading patterns time and again. But they can also be deceiving. That’s because most charts don’t share key data. It can tell you a price point on a given day—which is handy. But there’s more to a price chart than price. For instance, if a stock keeps moving higher day after day, it may look like a good trade. But if it’s bouncing around during trading hours and only barely heading higher, it may not look like the slam dunk that it could be. To find these extreme intra-day moves, and to get an idea of where the bulk of the trading money i...
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This Crash Alert Indicator Warns of More Downside in Stocks

Many analysts have indicators that warn of a bear market. But many of these indicators don’t work as well as expected. The biggest problem with a bear market indicator is the potential for false signals. That’s honestly a problem with many of the widely followed tools. Even the yield curve, one of the best predictors of a recession and a potential bear market is prone to this problem. Economists often joke that the yield curve has predicted twelve of the last six recessions. Even when the yield curve is right, the problem is that there is too much lead time. And, that is a large problem ...
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Recognize When to Expect a Flat Trade

Most folks just think of investments as things that go up or down (and even then hopefully just up). But the fact of the matter is, any asset can have a long period of time where it trades in a sideways range, bouncing between a high and low. Recognizing these ranges from a chart pattern is a good way to find short-term trades. It may not be the big grand slam of catching a major move up or down, but it can give you consistent profits time and again. These types of patterns occur in the markets all the time. They’re known as consolidation patterns, and they tend to keep a position...
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The Charts Offer a Surprising Message on Tesla

Tesla (Nasdaq: TSLA) is the company that some investors and analysts have an emotional relationship with. Some love the company and others hate the electric car maker. Both reactions seem to be due, in large part, to reactions to the company’s CEO Elon Musk. Musk has been the CEO and chairman of the Board of Directors but agreed to step down in a recent settlement with the Securities and Exchange Commission (SEC). The SEC began investigating Musk after one of his tweets attracted the interest of investors, and regulators. The terms of the settlement would be in the best interests of inve...
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Nothing Lasts Forever

There’s a great old saying on Wall Street: The trend is your friend. But what happens when the trend ends? After all, nothing lasts forever. That’s when things can become troublesome for investors. At least, for those who don’t know the signs. That’s because a stock’s pattern can give you a clue that a long-running trend is about to end. And whether that means a stock that’s been going up is about to go down, or a declining stock is about to rally. This is called a reversal pattern. And being able to catch one successfully is one way to grow and preserve your wealth—in any market ...
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The Odds of a Rate Hike and How to Play It

Over the past few years, arguably the Federal reserve has been increasingly important in the stock market. The Fed has always been important. But its current role seems to prop the stock market up. It doesn’t do so by buying stocks but instead, the Fed uses policy tools. The Fed Is Not a Stock Market Investor To begin with, it is important to emphasize that the Fed does not own stocks directly. According to the Federal Reserve Bank of San Francisco: Federal Reserve System does not hold corporate stocks, but it does hold government securities. The Federal Reserve's securities portfolio ...
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Wall Street’s Wisest Saying

There’s a great old saying on Wall Street: The trend is your friend. That’s especially true if you want to trade in the options market, where you have a limited amount of time for a trade to play out. Yet many investors, focused on a company’s fundamentals, don’t think about trends at all. It’s a critical skill for any investor—but it’s crucial for shorter and more leveraged trades like those in the options market. That’s why it’s important to consider all the factors that can cause a company’s share price to rise or fall. For longer periods, the fundamentals definitely matter. But f...
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Using Momentum Indicators to Forecast the Stock Market

Momentum indicators tell us a great deal about the stock market. These indicators can be a useful forecasting tool. But that might not be the way all investors look at these indicators. Momentum indicators are designed to measure the strength of the trend. They are usually thought of as short term trading tools. This makes sense because momentum measures the strength of a move and if a stock moves too fast, or shows too much strength, a reversal should be expected. That standard interpretation of momentum indicators is based on the fact that stock prices tend to exhibit mean reverting be...
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Scouting Out Your Next Big Trading Win

Trading can be tough for many reasons. But just as a general fighting a war may send on scouts, you too can scout out the options market for the best possible trades. Understanding how a company’s options usually move can prepare you to find moments where they’re making unusual moves. And by looking at options with unusual activity, you can get an idea of where larger investors in the options market are placing their bets. These larger traders—the so-called “Smart Money” on Wall Street— may not make huge profits, but they have a great track record of being right far more than wrong. ...
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