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Wealth Building Strategies

Technically Speaking: Tis But A Flesh Wound

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Posted by Lance Roberts - Real Investment Advice

on Tuesday, 06 February 2018 06:53

Flesh-Wound

In this past weekend’s missive, I discussed the recent market sell-off:

“Well, this past week, the market tripped ‘over its own feet’ after prices had created a massive extension above the 50-dma as shown below.  As I have previously warned, since that extension was so large, a correction just back to the moving average at this point will require nearly a -6% decline.”

Chart updated through Monday

 

.....continue reading HERE



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Wealth Building Strategies

Once in a Lifetime

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Posted by Rambus Chartology

on Monday, 29 January 2018 06:31

bubble-phasesWith the rally continuing to power higher in the stock markets I’m going to update the portfolio combo charts so you can see how this once is a lifetime rally in unfolding. When this impulse move finally burns itself out we will get a decent sized correction that may take a year or two build out. Until then the hardest thing for most investors riding this bull is to hang on for dear life.

For over six months or longer we’ve heard the never ending story about how overbought this market is, but the stock market doesn’t care what we think. The investors that have missed this rally are crying the loudest that the stock market has to crash because they’re not in it, if they were they would be enjoying the ride of a lifetime. At any rate the correction is going to come at some point and I can guarantee you that we won’t hit the absolute top tick. We have some price objectives that hopefully will get us out in time to enjoy our profits.

I’m going to start off by looking at the daily stock market combo chart. When looking at all the combo charts to follow note the two dominate chart patterns, the H&S’s and the rising flags and wedges. So far there is nothing on these charts that are suggesting a top is in.”



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Wealth Building Strategies

Investing in 'Tears of the Gods'

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Posted by Editor

on Thursday, 25 January 2018 09:32

a6d523bf535b1e50337274c2ebcc4721The charming mysticism of precious stones is the stuff of legend, and today, these ‘tears of the gods’ are opening up major new opportunities for investors.

Now estimated to be worth north of $100 billion, the gemstone industry is growing in leaps and bounds, with analysts projecting that demand for diamonds and gemstones will continue to outstrip supply.

A lack of new discoveries, a growing inclination towards branded ornaments, a plunging dollar and ease of access thanks to online shopping have combined to make this one of the hottest markets of the year.

While diamonds have led the gemstone surge in recent decades, it’s emeralds, rubies and saphires that are poised to boom, with Technaviot predicting that the global gems and jewelry market will reach $292 billion by the end of 2019.

One only needs to look at the prices of colored gemstones today to see where this market is going.

A 5-carat sapphire that was sold for $10,000 in 1965 fetched $1,000,000 at a recent auction.

- In June 2017, the famous Rockefeller Emerald sold for an eye-watering $5.5 million, making it the most expensive emerald – per carat – ever sold at auction.

- An 8.62 carat unheated Burmese Ruby sold for $3.62 million at Christie's in 2006, setting a new world record of $420,000 per carat for unheated ruby.

Prices of diamonds vs. colored gemstones are traveling on opposite trajectories right now, with diamonds in a years'-long slump and rubies and emeralds on the rise. 

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But that's only one part of the reason why colored gemstones are rapidly becoming 2018’s hottest investment.



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Wealth Building Strategies

Join the Few Who Gain from Economic Armageddon

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Posted by Marc Faber - Gloom Boom & Doom Report

on Thursday, 18 January 2018 06:44

Market CollapseThe warning signs that a market crash is looming are becoming louder and more frequent. Despite this, most market participants are behaving like it can never happen. In fact, bullish trading is pushing the markets to new highs on an almost daily basis. The warnings are seen, heard and then ignored.

Join the few who will take advantage of what's about to happen. The same few who profited handsomely when billions were lost in the last global economic crisis almost a decade ago rather than those who simply follow the herd.

For most people these warnings are like the graphic images printed on today's packets of cigarettes, they spell out the dangers and yet all the same people are still smoking.

Warnings about an impending market crash are being made by people who predicted with considerable accuracy in 2006 and 2007 what was ahead when the US sub-prime mortgage market collapsed and triggered the global financial crisis.

The one thing these analysts can't predict is an exact time and place for when the crash will happen. It's the same reason people continue to smoke; nobody can say with certainty the number of cigarettes required to kill a person.

So, trading continues regardless until the day the sudden dramatic drop in prices exceeds the 10 per cent threshold that officially marks the point that the crash has arrived.

Just as smokers only decide to stop when the physician says: "Mr Smith, I regret to inform you that you have lung cancer."

Swiss investor Marc Faber, also known as "Dr Doom", predicts that stocks are set to plunge by 40 per cent or more. Mr Faber, the editor of 'The Gloom, Boom & Doom Report' recently told CNBC: "We have a bubble in everything."

His caution is echoed by Nobel Prize-winning economist Robert Professor Shiller who has urged investors to tread cautiously because market valuations are at "unusual highs".

In a recent interview with CNBC, he said: "We are at a high level, and it's concerning," highlighting that the only times valuations have been higher were in 1929 and 2000.

Mark Zandi is chief economist at Moody's Analytics. In August he joined the chorus of analysts preaching caution after determining that the stock market is overvalued.

In an article in Fortune he said: "The stock market is due for a significant correction" adding, "stock returns in the next several years will be very pedestrian if they increase at all."

Last month HSBC issued a Red alert warning. They're looking at two key levels: 17,992 in the Dow Jones Industrial Average and 2,116 in the S&P 500.

"As long as those levels remain intact, the bulls still have a slight hope. But should those levels break and the markets close below, which now seems more likely, it would be a clear sign that the bears have taken over and are starting to feast," said head of technical analysis Murray Gunn. "The possibility of a severe fall in the stock market is now very high," he added.

However, according to Bill Blain, a strategist at Mint Partners, this time bond markets will trigger the mayhem.



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Wealth Building Strategies

Don't Be Afraid of Volatility; It's an Extremely Profitable Ace in the Hole

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Posted by Chris Johnson - Money Morning

on Monday, 08 January 2018 06:48

MarketVolatilitysignTraders and investors everywhere are spooked by volatility whenever it rears its head. We hear about it every time stocks take a tumble, even if that doesn't happen so much these days. So the Investopedia definition I'll show you is probably the last thing they're thinking of.

"Volatility: A statistical measure of the dispersion of returns for a given security or market index. Commonly, [emphasis mine] the higher the volatility, the riskier the security."

Now, that doesn't sound so scary, does it?

Volatility is nothing more than a statistical tool that shows how much a stock goes up or down. Yet many see volatility as a bad thing, because they equate it to risk. And risk is bad for us, right?

Well, sometimes risk is bad. But to the smart investor, volatility is a difference maker. Because without it, you might as well just buy a CD. More importantly, you have zero chance of beating the market. And where's the fun in that?

That's right: Without volatility, you don't beat the market.

That's why one of my 10 Trading Commandments is "Volatility is a trader's best friend!"

Now, let me prove it to you…

Directional Volatility Takes You "FAR" as a Trader

Think about volatility as merely the distribution of a stock's returns. The wider the distribution, the higher the volatility.

And the higher the volatility, the more the stock is moving, and that means we're getting paid if it's moving in our direction.

To beat the market, especially using options, we want volatility on our side. I call it the "FAR Principle" – fast, aggressive, and right.

I want a fast move to happen before my option expires. I need an aggressivemove that I can leverage with an option. And I need the move to be in the right direction to agree with my call or put.

Having volatility in my corner, along with picking the right direction, is how I (and you) get paid as an investor.

How to Find Volatility Before It Happens



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