Tag Archives: stock market

NASDAQ in the Spotlight

Have you wondered why the NASDAQ has become so popular? It is now the driving force leading markets higher. Here are some highlights from the pages of the NASDAQ:Continue Reading

January 2015 – Turbulence Rules the Markets

Some market watchers hold that January sets the tone for the rest of the year. If this January is any indication we are in for a bumpy ride. The markets have reacted to cross winds both international and domestic.Continue Reading

The Election in Greece: Syriza Party’s Stunning Win

It was to be a grand thing, this Euro. It was the water that would raise all the boats of each European country and for 10 years it did just that. The headquarters was set up in Brussels. A troika would rule. It was the European Commission, The European Central Bank (ECB) and the International Monetary Fund (IMF). Each country could issue its own bonds. Interest rates fluctuated based on the relative economic strength of each country. Germany with its strong industrial capacity and exports rose to the top. The Southern countries of Greece, Spain, Portugal and Italy lacked the exports. Instead they relied on the money from their bonds to put people to work in the public sector. What no one realized at the time was that all the new debt being issued would eventually need to be repaid in Euros, not their old currency. This inflated the debt.Continue Reading

Trading Woes on Black Thursday: January 15, 2015

Picture this. You are a very good trader, trading mainly with technical indicators. You use such tools as charts, Bollinger Bands, support and resistance, slow stochastic, money flow and several other indicators. These skills have served you well and you have a successful 10 year track record. You like the leverage of trading commodities and currencies. Currencies offer the greatest leverage, requiring only a 2% margin. That means that you put only $2.00 down for every $100 you trade. You are rather conservative and even though you have a $10,000 account you trade only $2,000. With a $2,000 margin at 2% you are controlling $100,000 of currencies. You are trading $2000 of EUR/CHF. Currencies are always spread trades. In this case you are buying the Euro (EUR and selling the Swiss Franc (CHF).Continue Reading

Big Banks Win – Derivatives are Back

Once upon a time in the long ago we had banks that lent money to individuals and companies to expand and grow the economy. During the Great Depression lawmakers saw the need to rein in and regulate banks’ activities. The Glass Steagall Act of 1933 ruled that banks could not become involved in selling or trading securities. Separate Investment banks were organized that could underwrite and sell securities but they could not use depositor money.Continue Reading

Debt Wipeout: The Great $4.45 Trillion Experiment

Imagine this scenario. Bankers and Mortgage Brokers have gone berserk writing mortgages for people who could not afford to pay them off. Some customers didn’t even make the first payment. Some signatures were forged to get approval. It was an era of pure “greed.” Now, imagine this fictitious conservation between two bankers: “Tom, you know we have a lot of junk here with some of these mortgages.” “Yes, says Bill. Why don’t we just package them together and resell them to hedge funds and pension funds? We’ll use a fancy name like Collateralized Debt Obligations. That way no one will know exactly what we are selling them.” This scheme goes along for a while until a few “sane” investors start thinking: “I don’t think we should buy this stuff.” There are no bids and the market freezes up. Panic sets in and the markets are in freefall. The bankers run to the politicians and beg, hat in hand, for a bailout from Congress. The politicians dream up a fancy name like TARP and give the bankers $787 billion of taxpayer money. However, this is just a drop in the bucket. A whopping $7 trillion of household debt has been wiped out.
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Market Volatility is Ramping Up-A Traders Game

Market Volatility is Ramping Up-A Traders GameContinue Reading

Ebola Stocks-Should You Invest Now?

The dreaded disease, Ebola, has captured the imagination and attention of traders and speculators. It has erupted in Africa and has spread quickly, causing 1,000 deaths, and 2,000 new infected cases. There is a dire race to find a cure. To date, no cure is available. This has prompted a search for biotech companies that have started to do research on Ebola.Continue Reading

The Fed Plans to End of Asset Purchases by October

For investors, following the US Federal Reserve’s policy changes gives us a heads up on possible market movements. Since 2009, the Fed has embarked on an unprecedented policy of quantitative easing with the latest round of buying $85 billion per month of treasuries and mortgage backed securities. The net effect of these policies has been to swell the Fed’s balance sheet to a massive $4.2 trillion. Now the Fed is in the process of unwinding some of this activity. In December 2013 the Fed started “tapering” or reducing these asset purchases. To get a sense of what the Fed is up to we look at the minutes of their recent meetings. These are made public for the previous month. The latest issue was for June 17-18.Continue Reading

Investing in Small Cap Stocks

We have a group of stocks that we refer to as “Small Cap.” They are defined as having a Market Cap of between $250,000 and $2 billion. Many are start ups trying to bring a new product or service to market. For example we are seeing many of the biotech stocks in this category. Many of them have a promising new drug but it first must go through rigorous testing by the FDA. This is a lengthy process involving several stages of testing, often lasting up to three years. Only a small group make it through. These become he new “stars” of the investing world and their stocks rise, often very quickly.Continue Reading