Stocks & Equities

The Uncertainty Principle In Markets

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Posted by Charlie Bilello - Pension Partners

on Wednesday, 22 November 2017 06:39

As an investor, what do you prefer: certainty or uncertainty?

Certainty, of course. We all do.

When things seem certain, the future looks bright and we embrace risk-taking. When things seem uncertain, it’s hard to imagine things ever getting better, and we shun risk at all costs.

But is there really such a thing as a certain environment when it comes to investing? No. There is always risk in markets, even if you can’t see it, and by extension, there’s always uncertainty.

It is only our perception of risk that changes.

If the recent past is a calm market filled with good news, we perceive things to be quite certain. If the recent past is a volatile market filled with bad news, uncertainty is deemed to be high.

How are investors feeling today?

Quite certain.

Volatility over the last year has been lower than any period in history.


At the same time, performance has been well above average, leading to one of the highest risk-adjusted return environments we’ve ever seen.



Stocks & Equities

Ride the Market Rally With Options

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Posted by Chad Shoop - The Edelson Institue

on Tuesday, 21 November 2017 05:10

Editor’s note: You could jump in and buy stocks as they trade near all-time highs. Or you can “lease” stocks for a lot cheaper with buying options. The low volatility in the markets helps make a compelling case.

The one thing I was certain would happen over the past 12 months turned out to be the exact opposite.

Last November, the newly elected president was committed to stirring up the typical D.C. drama.

President-elect Donald Trump had a mission to “drain the swamp.”

He promised to be a president who went against the grain of how things were done.

I, along with many others, expected the one thing the markets would experience in his presidency would be wild market swings, also measured as volatility in the stock market.

After one year, we saw the exact opposite.

Volatility, as measured by the CBOE S&P 500 Volatility Index (VIX), is at all-time lows.

The stock market has experienced one of the longest runs in history without a 5% correction.

In short, there is a remarkably low amount of volatility in the markets.

And I hope you are taking advantage of that by riding the market rally with options. Let me explain …

Use Volatility to Your Advantage

Options aren’t something most people associate volatility with, but it is the first thing that comes to mind for me.

See, options are a leveraged bet on a stock moving in a certain direction. And many people use options to do just that — place bets.

But you can also strategize with options to use volatility to your advantage.

Let’s start by looking at a chart of the VIX.

112017 1739 RidetheMark1



Stocks & Equities

Two Scenarios, One Strategy

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Posted by Gary Savage - Smartmoneytracker.com

on Monday, 20 November 2017 06:13

Whether the stock market is entering a multi-month parabolic phase or beginning a new multi-year secular bull market the trading strategy is the same. This video details that strategy. 

....also: Really, Are We That Stupid?

Screen Shot 2017-11-20 at 6.24.04 AM


Stocks & Equities

Stock Market Crash Omens And Predictions: Another Day Another Lie

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Posted by Sol Palha's Tactical Investor

on Friday, 17 November 2017 06:40

Never argue with an idiot. They will drag you down to their level and beat you with experience.

Mark Twain 

Over the past several years the Naysayers have predicted the Market would crash and burn; we blatantly disagreed and opted instead to state that the market would continue to soar higher and higher. Despite the severe beating these naysayers have taken, they insist on regurgitating the same trash over and over again in the blind hope that by some miracle their insane ramblings come to pass. As soon as October was upon us, these experts started screaming at the top of their lungs. What was their latest prediction; a repeat of the 1987 Stock Market Crash. We immediately repudiated these predictions. Here is a brief excerpt from the article we posted in October.  

They never seem to let up on pushing this sewage onto the unsuspecting masses. This is a clear example of insanity in action;  mouthing the same thing over and over again with the desperate hope that this time the outcome will be different.  The outcome will not be different this time, at least not yet. These guys should focus on writing fiction for reality seems to elude them completely. For years we have stated (and rightly so) that until the sentiment changes, this market will continue to soar higher and higher.

The latest nonsense is to state market omens that have a terrible record of coming to pass are about to trigger a crash; ones odds are better if one looks at tea leaves, plays with skull bones or hires some monkey to throw darts at a board with the words up or down plastered on it. One has to determine the trend first and look at several underlying forces before one can attempt to predict where the market is headed. However, these fools read a book or two, memorisesomeone else’s theories and assume all of a sudden they are experts. Fundamentals and technical’s are both useless when used in isolation. One has to look at the emotion driving the markets. In other words, what are the masses thinking or doing? When one looks at the sentiment data, the conclusion is inescapable. Stock markets always crash on a note of euphoriaand the masses are far from being happy. 

Masses are not embracing one of the Most Hated Bull Markets in History 

The images below speak a thousand words, so there is no need for us to add any commentary. 




Stocks & Equities

Todd Market Forecast: NAAIM Exposure Index Supports Further Rally

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Posted by Stephen Todd - Todd Market Forecast

on Wednesday, 15 November 2017 06:13


Todd Market Forecast for 3:00 pm PST Tuesday November 14, 2017.

DOW - 30 on 725 net declines

NASDAQ COMP - 20 on 382 net declines



STOCKS: The weight of the evidence suggests a market that should move higher, but it's being suppressed by the lack of progress on at tax reform plan. More revelations about Senate candidate Roy Moore are also contributing to the uncertainty. As you know, the market hates uncertainty.

One specific factor leading the market lower was a drop in commodities such as crude oil

GOLD: Gold was down in the early going, but came back to up by $2.

That is normally a bullish pattern.

CHART: We have been showing the put call ratio and noting that it shows sufficient bearishness to support a multi day rally. Here's another measure of sentiment. It comes to us courtesy of Tom McClellan of McClellan Financial Publications.

It is the NAAIM Exposure Index and measures the overall market exposure of money managers. Right now it's under 60%, which shows a lot of bearishness.  

Screen Shot 2017-11-15 at 6.24.29 AM

BOTTOM LINE:  (Trading)



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