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Unemployment Question

There is no doubt that unemployment is one of the most popular topics in the media at the current moment. No wonder, as unemployment remains at high level since the stock market crash in 2008. Whatever the Government does (actually they have done nothing), nothing seems to reduce the number of people without work. If the Government expects that the corporation start opening working places (at least that is their explanation why the corporation should not be taxed) then I could only say THEY ARE WRONG or they think that the people are stupid. A corporation does not need extra expenses, and there is no stimulus for them to open working places in the USA until it is more profitable for them to do it oversea. That is why majority of them moved their customer support to India and China, that is why more and more "made in China" and "made in India" and less and less "made in USA" could be seen on the shelves in our stores. To tell us that if we do not tax the corporation they will have more money (they already have billions) and they will think about expansion and creating work for Americans is keeping us for idiots. We have to tax them and the taxes should be strict.

My proposal - pass it to those who you voted for if you like it:

1. If  more than 20% of corporation's expenses are over-sea's expenses (whatever the expenses are: supplies, customer support, development, etc) than this corporation  has to pay additional 15% tax not from the profit but from the overall over-sea's expenses.

This will make the corporation to think where to expend their business and will make small and medium businesses stronger and more competitive to the big corporations.

2. The exemption from the p.1 are  the companies that has more than 50% of profit coming from export (companies that deal with natural resources, oil, mining and other companies should not be covered by this exemption).

We need to balance import/export and we need t protect those who export.

3. A company that show grows in the number of employees (not over-sea's employees) that worked more than 1 year in this company is entitled for the tax deduction (max 5%).  The companies that deal with natural resources, oil, mining and other companies should not be covered by this exemption).

It should definitely attract the companies, small and big to open new working places and make it easier for them to invest the money they have into the company’s expansions.

I could add more points, but I think it is enough for you to start thinking.

Do you think if we would have such policies it would increase the revenue, it would help with trade balance and it would reduce the unemployment?

If your answer is yes, and you like it then 

SHARE IT
and Pass it to those who you voted for and those who you are going to vote for

ETFs Analysis

When it comes to the trading Exchange Traded Funds (ETFs) you have to understand that in most cases ETFs are derived products. They are usually designed / set to track performance of the indexes, groups of stocks or various commodities. As an example QQQ stock is developed to reflect the performance f the Nasdaq 100 index, the SPY stock is set to track the S&P 500 index, IWM tracks the Russell 2000 index, VXX tracks the VIX volatility index, GLD tracks the price of gold USO tracks the price of oil, an so on...

Because of the fact that ETFs are always tracking something they are often called as tracking stocks (they are called stock because these funds are traded exactly like stocks). Because of this tracking ability you have to understand the the price of an ETF is not always driven by the suply and demand in the ETF itself but rather by supply and demand in its benchmark index or benchmark commodity. Respectfully, it is always recommended to analyze benchmark index or commodity in junction with your ETF. So, if for example you trade SPY stock then it is essential to apply technical analysis to the S&P 500 index in the same way you do it with SPY. If you do not do it, then at some moment you may face a situation that despite all signal on SPY it moves in opposite to predicted simply because you did not know about opposite signals on the S&P 500 index.

New Blog

As I already mentioned several times ago, I use this blog for informational purposes only. I do not use it any more to post my thoughts about stock market and I do not show elements of my technical analysis here anymore. I have moved my blog to the new location which could be found at
www.tradingstockmarkets.com/

ETFs Trading

When it comes to the beginning of trading of the Exchange Traded Funds it is very important to ask yourself several important questions as

1. What is your investments goal (except more money..) - are you saving for retirements? are you planing to become a professional trader? or do you want just to keep money safe and secure them from inflation ...
2. What type of trader are you? - are you long-term trader who puts money in the market with the purpoce of extracting them in several decades? are you mid-term investor who follows the market and keeps an aye on the economy and time on time reinvest money around the stock market? or are you short-term trader who basicaly leaves with the market and spend most of the time by analysing and trading it?...
3. What funds are you ready dedicate for investment?
4. How mush from your portfolio are you ready to loose?
5. ...

The list could go on on. As you see, before begging to invest into the stock market, you have to ask yourself general questions. Many novice traders are coming to the market without previous planing and you will be surprised to know that many of them o not have answers on these simple questions. Eventually, without previous planing a trader is marked to lose twice more money and to spend twice more time before he or she actually starts to make something on the stock market.

I know, this is boring stuff to do research, yet, if you are going to put your money on the table you better get know what kind of table is it. Only when you know the answers on these general and simple questions you may start trading ETFs.

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You will have access to streaming quotes and charts, various research reports and various trading tools for free. - You do not have to trade, as long as you have some funds on your account, your optionsXpress account will remain opened and you may use all fundamental and technical analysis tools available with optionsXpress. This is a great opportunity for a novice trader to learn about trading for free (and get $100).

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Discount Codes to online financial services and web sites

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(If you do not want to sign up now, I would recommend to bookmark this link for future references)

ETFs Trading

Exchange Traded Funds have become very popular over the past decade. This is one of the simplest way for many investors to trade the market. Amazing thing is that not just retail traders are using ETFs, but many professional investors, portfolio managers and big companies are investing into the ETFs.

One of the best thing about Exchange Traded Funds is that there is no need to perform fundamental analysis in order to start trading, especially when it comes to the trading funds that track indexes. You do not have to do it! Why? Because it is already done by the sponsors of the indexes. The index listing is revised on the regular basis and weak companies (stocks) are removed. As a result, a trader (investor) may solely focus on other aspects of trading such as technical analysis, developing a trading system, and etc.

So, do not waste you time in research of the magic stocks that can make you a fortune. Focus on something you are capable of doing. I do not believe that a simple trader has ability and access to precess thousands of information (reports, balance sheets) for thousands of stocks and do it on regular basis. trust the professionals who already do it for indexes and trade indexes through the Exchange Traded Funds (ETFs).

Technical Analysis - Moving Averages

What is the most important indicator in technical analysis? Some of the traders may name you a row of various indicators which they learned from the bottom to the top and which they consider as the most useful and the most important in making a trading decision. The reality is that the most important indicator is the simplest one. The indicator without which technical analysis would not exist at all. The correct answer on the question about the most important indicator is - Moving Average.

Moving average is the basic and the simplest indicator in technical analysis. I would recommend to any beginner in technical analysis to start from moving average. Moving average is simply average value over specified period of time (price bars). There are a number of various moving averages, starting from the SMA (Simple Moving Average), EMA (Exponential Moving Average) and by finishing various complicated Weighted Moving averages. This technical indicator could be analyzed by itself but it also used as a component in most of the other indicators.

There are several thing that on the first view could be seen obvious, yet, that every trader should always remember about moving averages:

1. Moving averages are used to smooth movement fluctuation. It could be applied to price, volume, advance/decline data or any other data and technical indicator to smooth choppy movements and to see general direction of the movement of price, volume or any other indicator.

2. While moving average smoothes movement it brings factor of a delay (also known as a lag). The more you smothe the bigger lag is and the further in the time the moving average is shifted from the real movements.

When you go deeper in technical analysis there always will be a conflict. From one side you want to avoid choppy trading (frequent signals) which usually generates number of fake signals and from other side you want to keep the lag (delay in trading signals) as small as possible and to avoid late entering and exiting a trade. From one side you will have desire to increase bar period setting of a moving average or any other technical indicator to have more smooth trading and from other side you will be willing to have signals as close to the tops and bottoms as possible.

The truth is it is not as easy as it looks like. There is no golden rule what bar period setting should be used with moving averages or any other technical indicators. Before, selecting a setting for an indicator (in our case moving average) that would generate signals, a trader should learn how to recognize different market conditions. Because in different markets different setting would be recommended.

Technical Analysis

There is a common statement that technical analysis is not exact science. There are so many researches done, there are some many simple traders and professional institutions focus their attention on technical analysis, that it is difficult to say that it is not a science. It is definitely science but it still not an exact one. It could be compared to the astrology where you take the results of the past historical observations and look for the patterns and then based on the found patterns you build prediction of possible future price trend developments which, of course, are not guaranteed.

The main purpose of the trading on the stock market is to make money or to secure the money. In ether way technical analysis is one of the tools that is dedicated to help a trader in his/her trading. Yet, it is difficult for a novice trader to figure out where to start from, as there a hundreds of the indicators and hundreds of theories on how to use them. It is not easy to find a way in technical analysis. If it would be easy then everyone would be a winner and this is not how the stock market works.

Trading Signals

Overall, the sentiment cold be considered positive for tomorrow's trading session. The Nasdaq 100 has broke its January 22nd high which could be considered as a good confirmation of bullish sentiment. S&P 500, DJI and Russell 2000 are close to break their highs as well.

Another positive sign that would favor bulls on the current stage is that the last two trading sessions' up-move did not generate any strong volume surges and we did not see any high advance/decline readings on the NYSE Composite and S&P 500 indexes. Therefore, we may assume that there are no overbought signals despite strong rally up we had during the last two days.

Another bullish sign is the decline in volatility which is usually associated with confident and positive trading of the bulls.

Nasdaq 100

Nasdaq 100 trading is one of the most popular types of the trading on the stock market. When it comes to this index most traders are referring to the trading of the Exchange Traded Funds such as QQQ, QLD, QID as well as options on these ETFs. Smaller part of investors is referring to the Nasdaq 100 emini futures and Nasdaq 100 Rydex and other index tracking funds.

One of the reasons why this index attracts so many investors is the possibility to avoid complexity of fundamental analysis. When it comes to the stock trading you may find that most of the time you have to spend on the research of your stocks, tracking news about your stocks, analyzing of balance sheets, earnings, company's prospectus and other reports from the companies. In case of the index trading the fundamental analysis is already done by the company sponsoring the index. For Nasdaq 100 index the fundamental analysis is done by the Nasdaq OMX Group. They track all stock from the index's basket analyze their earnings and other reports on regular basis and exclude weak stocks from the listing by placing instead stronger stocks.

As you may see, by trading the Nasdaq 100 you may solely focus on the elements of technical analysis. That is why many institutional and retail investors more and more are focusing their attention on the QQQ and other index tracking stocks. However, ETFs technical analysis is slightly differs from the stocks technical analysis. As a rule, stock traders are focusing their attention on the analysis of the indicators and studies applied to the stock price and volume quotes. However, price movements of the index tracking ETFs greatly depends on the price movements of the benchmark indexes. Such, QQQ trading require to perform technical analysis of the Nasdaq 100 index. In addition to the price and volume quotes, the indexes have big group of the breadth indicators which are based on the advance/decline quotes. Respectfully these data has to be analyzed as well.

Overall I would say that technical analysis of the indexes, in our case analysis of the Nasdaq 100 index, is more complex than the technical analysis of the stocks, yet, as I already mentioned above, you are avoiding much more complex fundamental analysis.

At the end I would like to list some two resources that are essential for trading Nasdaq 100 index:
1. Volume – while most of the online brokers provide index charts free of charge, yet most of them will give you only price charts and it is very important to have access to volume charts and data
2. Advance/Decline – the same as above, you may find some free sources of NYSE advance decline data, however, there are not a lot of online sources of intraday advance decline charts.
The rest of technical data could be usually obtained at no charge from your broker. For Nasdaq 100 intraday volume and advance decline charts – two references above are the only place as I know you where can get it.

Russell 2000

Over the past week I have been pointing on the negative sentiment on the major US indexes (Russell 2000, S&P 500, DJI and Nasdaq 100) - see daily posts in my new blog (follow the link in the header). It looks like the recent market movements are lead by the Russell 2000 index as it has higher volatility than volatility on the other indexes and volume surges are more noticeable on this index.

While volatility remains at relatively low levels, the odds are not high that the current correction may grow into a strong decline. However, after overall positive trading since September 2011 (8 months) we could expect some period of side-way trading. Still the danger o inflation may continue holding indexes and stock market from strong declines.

For more detailed daily outlook visit my new blog.

Technical Analysis

I have already posted several messages that  I have moved my blog to new location. You may find the address in the previous two posts, s well you may simply click at the title of this blog and you will be redirected to my new blog.

The main difference of the new blog is the frequency of the posts. Right now, I'm trying to post the results of my technical analysis on the daily basis. The daily analysis is mainly based on the analysis of the money flow on the lower chart's time-frames and the results are represented in the simple market outlook with what to expect at the market open on the next trading day as ell as overall outlook for the next trading session.

In addition to the daily market outlook I continue posting on weekly basis results f my technical analysis based on the hourly and daily index (S&P 500, Nasdaq 100, DJI and Russell 2000) charts.

Volume continue to remain as a main factor in my technical analysis, as I consider that only volume may reveal the actions and sentiment of majority of the traders.

New Blog

One more time I would like to point I have that I have relocate my blog. For the most recent posts please go to

Trading Stock Markets

I have disable comments positing on this blog, so, spammer please do not waste time by trying to post junk. Those who would like to contact me my find may find a contact form at my new blog.

Blog Migration

I will be moving my blog to new domain TradingStockMarkets.com. Those who subscribed to my blog via RSS feed, Facebook, Twitter, etc, should not worry. There is nothing has to be done. As it was before you will continue to receive my updates.

Web visitors, please follow the link below:
TradingStockMarkets.com to see he most recent posts.

US Dollar continue to rize

As I mentioned over the last couple of days: with volatility at these high levels, we should be ready to strong and sudden swings. High Volatility always have been a sign of mid- and longer-term bearish mood. On Sunday in my "Side Way Trend on Indexes" post I have pointed to the few signs that suggest dominance of mid-term Bears. Lets see if they will be able to break the low seen on November 16, 2010 on the S&P 500 and Nasdaq 100 - DJI's low was broken yesterday. Or it will be another session of strong swing at the morning and then side-way trading for the rest of the day (as we had over the last two weeks).

US Dollar index is up, and it looks like nothing will hold it from moving higher to the August 2010 levels. Stronger dollar is another force that support bearish trading.

I'm moving from 15- and 30-min harts to the 5-and 15-minutes time-frames. One of my rules is to lower time-frame on higher volatility or reduce bar period settings.

Dollar Up, Indexes Down

Despite the fact the emini index futures were positive yesterday afternoon, as I expected (see "Side-Way Trend on Indexes"), the indexes are down today.

The money flow on the 15- and 30-minutes charts continue to stay negative. Money flow on hourly charts is still continue to be neutral, yet, it slightly tends to become negative. If it happens, I would expect further and stronger drop.

The US Dollar index is up and this is playing on the hand of bearish traders.

I'll continue staying on the 15- and 30-min charts.

What to Expect?

The past week was short (Thanksgiving week had three full trading sessions and one short trading session), yet, quite volatile. Actually, we may consider that since November 18, 2010, the DJI and S&P 500 are in side-way volatile action. The Nasdaq 100 index (mainly because of the swing at the morning on November 24) is only about half of the percent higher.

While the main indexes (S&P 500, Nasdaq 100, DJI and Russell 200) are topping sideway, there are some indexes that are in clearly defined down trend - as an example, see Dow Jones Utilities index that could be considered in down-trend since October 20, 2010 and S&P 500 Financial index that has been moving down since November 4, 2010. Overall, lately we had mostly negative and side-way sentiment.

Taking look at technical analysis from the mid- and long-term prospective we may not see a lot of positive signals. The money flow on daily charts (1 bar = 1 day) is moving down. It is not negative on the S&P 500, DJI and Nasdaq 100, yet, it is close to become negative. After September-October rally up, the indexes could be considered quite overbought. Yes, some traders may say that the correction we had during the second week of November could be enough to release the stock market from its overbought pressure, yet, it is difficult for me to believe in that by the following two reasons:

- Some indexes are still in decline.
and
- We did not have any strong volume volume surges during that correction (with exception on the Nasdaq 100). The correction down does not ends on low volume. In most cases corrections down and down-trends have strong volume surges at the bottom and we have not seen it yet.

Overall, I'm still bearish over mid-term. However, I numerously mentioned in periods of side-way trading that when there is a clearly defined upper and lower line of side-way corridor (as it is now on the S&P 500 and DJI) it is always a good trading strategy to set a stop-loss.

From the short-term prospective, technical analysis is not positive as well. The money flow on 1-min, 5-min, 15-min and 30-minutes charts is negative. It is neutral on hourly charts. I would expect to see negative trading session tomorrow. However, we should remember that volatility is at high levels and we may see strong swings in either direction. Personally, I plan monitoring 15-min and 30-min charts tomorrow.