Stock Preacher

New home sales in the USA rose last month at the fastest rate since 2005, the US Commerce Department said yesterday in a report, highlighting the case that the hammered US residential real estate market is staging a recovery. Separately, official figures showed that new orders for durable goods tallied up their biggest jump in 2 years in July, as aircraft purchases soared and the US Cash-for-Clunkers program fueled a big rise in demand for automobiles. Sales of new homes jumped by 9.6% to an adjusted annual rate of 433,000 in July. The 4th consecutive monthly rise beat even the most bullish forecasts of Wall Street analysts and exceeded the revised June jump of 9.1%. New home sales are still off by 13.4% compared with the same month a year ago. Buyers are responding to low prices and the popular 1st time home buyer tax credit which has succeeded in luring people back to the market. The median price of a new home slipped a bit to US$210,100 in July and is off by 11.5% year-on-year.

Popularity: unranked [?]

Successful traders always have a plan and follow it.

Traders who fail do not have a specific plan, they enter and exit with out reason or they enter and then do not exit until losses are painful.

In short, the unsuccessful have no exit strategy, or if they do, they do not follow it

Successful traders wait until the trade comes to them, they do not force the trade. Rather they exercise discipline and ignore that temptation that always suggests: “let a loss run just a little more, it will come back.” The fact is that: the loss that runs just a little more often runs a lot more. Read more

Popularity: 2% [?]

No chart pattern formation is a absolute guarantee of market direction, but it is extremely helpful when the trader is aware of the chart’s pictures.

All traders make directional trades in stocks, commodities and forex. I, for one, try to enter trades that are in tune with the market’s direction. When I do this, I give myself an edge (Red’s Edge) because, when a market is rising, most stocks can be expected to rise, as in “a rising tide floats all boats” as some put it; that’s a Bullish POV. The opposite is true when the markets turns South, in that one can logically expect most stocks to be down when the market is down, hence, the bias on directional plays will turn Bearish.

In the Trenches: Even if you know absolutely nothing about how to start making a living in the stock market, and want to learn how to do it, the first step is to learn from someone who knows how to do it successfully. The stock market is about success, and the lifestyle that comes with it, but it must be done carefully, both by picking the issues and in the trading of them, because one wants to make money doing it independently and without stress. “A journey of a thousand miles begins with the first step” (Confucius).

Download the latest Edition of the Red Roadmaster’s eBook, Knowledge is Power, Its Free!

Have a great weekend!

-Red

Popularity: 2% [?]

I am Bullish long term, the internal action of the market tells me that this correction is acting normally, and will soon yield to the long term up-trend.

March 9 to early June was red hot, with the (lagging) DJIA advancing 37% and the S&P 500 running up 41%.Since then, we are having a textbook one-month rotational  correction, sending the DJIA and the S&P 500 South by 6% and 7% respectively.

The Big Q: What does this mean?  
 
The Big A: From my POV, it is a buy signal. This new Bull Market is acting just like every previous Bull Market.

Read more

Popularity: 2% [?]

The world’s largest money managers say China’s steepest monthly stock gain in more than a year shows the fastest-growing major economy will avert a recession. The Shanghai Composite Index is the broadest measure of shares traded on the Mainland posted a 9.3% gain in January, the best among the world’s 10 biggest markets. Last year, the index fell 65 percent, the worst since at least 1996, according to data compiled by Bloomberg. Chinese shares rebounded after the central bank lowered interest rates five times since September and the government announced a US$585B stimulus plan. China’s economy is expected to grow near 8% this year even after expanding 6.8% in Y 2008 Q-4, the slowest pace since December 2001. China’s central government is pressuring state owned banks to increase lending as it unveiled the 4 trillion yuan stimulus package, reduced export taxes and agreed to provide support for 10 industries, through tax cuts and subsidies for steel and autos.

Popularity: 7% [?]

US Treasury yields have moved South to the lowest levels since the ’40s, because investors are very fearful of this global economic downturn + the potential deflation on the horizon and have rushed to purchase the US government issued debt paper considered among the safest asset classes. The fact is that this may turn out to be the biggest investment bubble to date and may be on the edge of popping. According to a article in Barron’s today, the big risk to the Treasury market comes from the potentially inflationary impact of both the Federal Reserve’s extreme accommodative monetary policy, which sent short rates to zero +, and the huge fiscal stimulus slated to come from the US government this year. It is expected that it will take higher yields to attract investors, particularly foreigners, as the US Treasury works to fund an estimated deficit of US$1T + this year. Savvy analysts are saying “get out now”. Why, because other parts of the bond market are calling including municipals, corporate bonds, convertible securities, some mortgage securities and preferred stock. The average junk bond now yields 20%, compared with 9% at the start of 2008. Triple-A-rated Muni’s with 30-year maturities are yielding about 5.25%, almost double the yield on 30-year Treasuries. The yield differential between the two markets is unprecedented. Until this year, Munis almost always yielded less than US Treasuries because of their tax benefits. A Bearish stance toward US Treasuries and a Bullish one toward the rest of the bond market represents the consensus view. Most equity and bond analysts surveyed last month by Barron’s projected the US Treasury 10-year note would carry a yield of 3% or higher by the end of 2009. At the same time, it’s hard to find Bears on corporate bonds. It’s nice to be contrary. Sometimes, however, the consensus view is right.

Popularity: 6% [?]