New market records and update on US market status

The US markets hit new all time records this past week and breaking new levels.  The US was one of the best countries (some may disagree) to invest in stocks, housing, industry sectors, some commodities, mutual funds, etc, this year.  Below, i have some indices for some countries.  These indices measure or can tell you how well this country did financially and the US is on the green side for 2013.

Japan Nikkei 225                                     51%
United States S&P 500 Index                    29.11%
Global Index GDOW The Global Dow              24.16%

Russia Market Vectors Russia Index ETF       -4.5%

China Shanghai SE Composite Index           -7.4%
Brazil Bovespa Stock Index                        -15.89%
Peru EPU iShares MSCI All Peru Capped         -28.3%

This year was not a good year for emerging markets such as Brazil, Peru, and China.  Although, China's gross domestic product (GDP) has been a whooping 7% or so, their indices has been pretty bad.  The question is, will the emerging markets turn to the upside in 2014?  They can.... but it's not a sure thing.  As the global index, and US is forecast-ed to keep going up, emerging markets may be able to get on the same ride on the way up.  

Now, this bring me to the reason why i'm posting today.  The US markets may keep rising for 2014 all the way.  The Federal Reserve Bank announced tapering last week (reducing bond purchases and other stimulus) at 10B per month.  They gave a date of expiration until Sept/Oct 2014 and as long as the economy can carry itself.  Since they gave this date and due to other technical analysis (like the Elliott analysis from Caldaro and Vtrader), US markets are very likely to be profitable this Spring and Summer of 2014.

So, the markets won't top early this year as i had suggested (crossing fingers).  The top may come in Sept/Oct when the FED stops buying bonds or if the US markets rally another 15 to 20% against the GDP this year.  A similar bubble happened in 2000 (see graph).


(reference from Vtrader)

This bull markets has been running with positives profits since 2009.  There is no markets in history that runs up and up without a top and drop.  Once this top comes in, a 30 to 50% of market loss is projected.

My trading strategy didn't come as planned.  I finished my 401k at 20.7% up YTD and my broker account is up 15% YTD.  Still, profits are better than nothing.

Merry xmas all and happy new year!

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My trading strategy and gains for 2013

401k = 20.7% up YTD 
Broker = 15% up YTD

How do you trade?

I get this question several times.  How do you trade?  How does it work?  It is very simple.  No science to it.  It is just a simple way like buying a car or a house.  When you want to buy a house or car you buy for the lowest price possible.  You buy at the lowest price so you can use the whatever other money left to buy other things.  The same goes with buying stocks.  You buy low or cheap.  Moreover, when you buy a house, you hope that the price of the house will go up so you can make equity (extra cash) if you sell the house later as the house appreciated in price.  Unfortunately, this does not work for cars most of the time, as they depreciate in value.  But, my whole point is: when you buy stocks, you want to buy them low, until they reach a higher price and then you sell them.  This is how traders play/invest to take profits in Wall Street.

Now, what do you use trade?  You use broker accounts.  All they are doing is helping you be in the middle of Wall Street and you.  Of course, for a small commission.

Is there an edge or a way to know when to buy or sell?  Yes.  It's not 100% but you can stay on the 60 to 80% if you learn how to do it right.  It is said that if you want to be a good trader/investor, you need to win 6 to 8 times out of 10 times.  The other 2 to 4 times are losses.  Now, these losses have to be good losses.  I mean, that if you start seeing a loss on your buy, you get out if your loss hits your stop loss (read Richard Wycoff for more info).

When i make my decisions to buy and sell, i use Elliot Wave theories to guide me through the stages of the markets.  I read volumes to see how much traffic of purchases are trading.  I check Europe and Asia periodically as they can affect the US markets and viceversa.   Fibonacci retracements are great guides too as they can help estimate the course of a trend together with RSI (Relative Strength) and MACD.

Anyway, you can keep going and talking about this stuff.  In regards to my trades, i sold all my BOIL shares for a nice profit to buy me coffee for 6 months.  The next day, it went up to 8.5% and i could have double my wins.  Today is up a little.  Oh well.  You can never win all.

I'm on UGL (Double Bull Gold ETF) as i'm speculating for Gold to go up.  Also, I bought some Double and Triple Bear ETF against the US markets.  I'm hoping for them to decline and crash.  But, it's a tough call as the Long Term trend is up (Bullish).


Laters


My trading strategy and gains:

401k = 20.4% up YTD (0% invested - waiting for drop to past).  Projection by end of year is 24%
Brokerage = 15.3% up YTD (10% invested on S&P double and triple short ETFs and Gold double long ETF) Projection by end of year is 23%

Bit coins break through $1000

I was so close to get in it when it was $400 but got busy and didn't do it because you had to create an account, then verify your checking account, then transfer money from my broker, then get confirmation from CoinBase.  I got lazy and now I missed it : (.  There are still some traders talking about this trade that it will run higher.  But, i won't get on this train this time.  This one is an example of a perfect bubble ready to pop.

Here is the post from CNN:  http://money.cnn.com/2013/11/27/investing/bitcoin-1000/index.html?iid=Lead

Talking about trades, i'm starting to short the main US indices: S&P, DOW and possibly Japan Nikkei.  When i say short, i mean to invest and bet that the indices will drop.  In return, my investment grows.  The investment strategy is called "shorting".  As traders/investors begin to feel a top is near, they buy these short ETFs and funds in the ETF grow.  I'm only testing it to see if the top is in.  I'm buying a little and placing a stop loss at this weeks high on the S&P.  If the US markets break higher, then i sell at a small loss and repeat the test again as i think the medium term top is near.

My BOIL (Natural Gas double ETF) shares are doing fine.  I was able to catch the bottom and it is going up.  But, have to keep an eye as it is not going higher for long.  Natural gas is in a long term depreciation of price.  There is too much gas in the US.  High supply = lower price.  So, what i'm catching right now is a reaction of too much selling with lower prices and some buyers jumping in and bringing prices up for some time until the selling continues.

Laters


My trading strategy and gains:

401k = 20.4% up YTD (0% invested - waiting for drop to past).  Projection by end of year is 24%
Brokerage = 14.8% up YTD (5% invested on S&P double short ETFs and Natural Gas double long ETF) Projection by end of year is 28%

Bit coins and US market top

I almost bought some Bit Coins (virtual currency).  The price shot up from the 300's to the 700's in a few weeks.  Unbelievable!  It has now dropped to the 500's.  Guess i'll have to get on the game.  But, have to be careful.  It is very risky now and the returns (if it goes well) can be very rewarding.

In regards to the US market top I had posted about, we are still waiting for market top next year (not this end of year anymore - crossing fingers).  Tony from Caldaro's site is forecasting for a market top this coming year by early Spring or so.  If not, the markets may get an extension to the 1900 or 2200s (S&P point wise).  This is still good news!  But, it all depends on how the FED printing policies will remain and how the goverment budget spending is taken care of.

For now, i will sit back and try to enjoy the ride until the above gets resolved.  There are many analysts and Elliothicians calling for a Primary wave down that should take the markets for a test down to the 8 to 14% of market loss in the coming weeks or months.  So, i'm going to keep an eye and hope to catch the long ride down and up through the months to come.




My trading strategy and gains:

401k = 20.5% up YTD (0% invested - waiting for drop to past).  Projection by end of year is 24%
Brokerage = 14.8% up YTD (5% invested on double long ETFs and Natural Gas double long ETF)  Projection by end of year is 28%

-- This is Market Analysis, not a recommendation.

Gov. Shutdown and Debt Limit

Well, we finally got our government to open again and the debt limit was again postponed.  I'm glad both parties (dem and rep) got to some agreement otherwise, we would have gone in to some big dodo.  I mean real crap! (housing loosing equities, countries dropping their debts, lots of lay off, i mean frigging chaos, etc).  Anyway, the debt limit was moved for sometime in January i think.  It may be another time to watch out for your investments.  I would not buy a house at this times.  I'm starting to guess what the next bubble will be to initiate the next coming crash of the US markets.  Is it the tapering of the Fed by stopping money printing?  Will it be the crash of Europe (they are kinda shaky; much better but still shaky).  Or will it be the default of US debt in January or at the next postpone date if they do postpone again in say.... March/April?  All right, i don't want to feel like a doomster here.

On the other hand, my 401k is rocking and over 20% now as of today.  I'm getting close to my target of 24% by the end of year.  I bought some longs at the lows of first week of October before the whole government drama.  Google rocked the house today and profited 14% in one day!  The shares topped $1000 per share and i'm reading in the trading community that they may get even higher!  I'll see if i can buy me some GOOG at the next dip.

Laters

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My trading strategy and gains:

401k = 20.3% up YTD (90% invested on large caps).  Projection by end of year is 24%
Brokerage = 16% up YTD (5% invested on double long ETFs)  Projection by end of year is 28%


-- This is Market Analysis, not a recommendation.

My reply against another blogger complaining Caldaro's technical analysis

Erka11 says:

October 11, 2013 at 3:45 am

Tony’s misguidance claims another victim: Juaren has finally seen the light !
A lot of counts from bloggers are in contradiction with Tony’s main analysis.
Tony has completely lost it.
His calls make no sense whatsoever, they are inconsistent.
He counts waves C as abc structures outside of the exclusive triangle formation when it suits him and when he is stuck with a count, in contradiction with all basic EW rules.
He maintains his inate call for P4 and P5 to end in a 3 or 4 months.
He has major waves lasting a few weeks and Intermediate a few months.
All this time he has been praised for correctly deciphering when in fact his great strength is too appear to quickly adjust when he makes a bad call which happens more often than not.
His pivots only work randomly. The latest market end points: 1726 and 1640 are outside of his pivot range.
This site and this method is a fraud and the current market moves are exposing it as such on a daily basis.

Reply

• joseph3000 says:

  October 11, 2013 at 5:18 am

  Wow. That’s deep! I still like Tony tho. Is there anyone out there who is more accurate than Tony? Don’t think so… I’m a OEW graduate too and find this site more helpful than many others. Hope you didn’t miss this rally : ). Remember, this is not a short term/day trading site. Gl Erka

  Reply

The Elliott Wave Theory

The stock market or us markets are a combination of funds, stocks, and many other means of investing.  Many people and institutions from all over the world buy and sell in order to take a profit.  Now, how do you take a profit or how would you know when to take a profit?  There are many platforms, theories and indicators that these "people" or traders/investors use to ride the waves of money flow into the markets/funds/stocks.  There is one theory i found last year that i'd like to share.  I think it is very interesting.  It is the Elliott Wave Theory.

The theory suggest that markets, funds, stocks (national or international), and even industry investments or minerals or anything we use (coffee, gold, etc), move in rhythms or waves to the upside or the downside.  When i say that it/they move, i mean it/they move by price in longer periods of time.  I won't explain in details how the Elliott wave works but you can look it up in Wikipedia or Google.  Read it and you can learn when to take profits.  

Over the past 4 or 6 years i have always interested in investing and growing my own money, my retirement account, my kids schooling, my housing investment.  But, since last year that i found the Elliott wave and other indicators, i can feel that i am now in charge.  I don't need a financial adviser anymore.   I will only need to let the waves ride me through the ups and downs of the economical and political games.  

So, i suggest you read about the theory (there are others but this one is better) and let me give you some other links from these professional analysts.  Most of these analysts are advanced.  They have many years in the us markets trading industry:

http://elliotwavetrader1.blogspot.com/

http://caldaro.wordpress.com
http://www.wavaholic.com/

Laters

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My concerns and strategies of the S&P these days

Week Aug 12th:

In the past days, the US markets has been experiencing a medium size correction.  Markets have topped in around August 2nd with the S&P at 1709.  The S&P is expected to drop around 10%, but we can't tell for sure if this will happen at exactly 10%.  It may be 6, 8, 10, 12, or 14%.  So, the average is 10%.  

Since late July, i have been all cash with my 401k and brokerage account.  I'm waiting for the markets to bottom at around 8% and i'll start buying.  But, one thing worries me.  In May 6 of 2009, the markets when down around 6 to 8% in 1 day.  The drop was part of a major correction called Major wave 2.  This summer, we are experieincing a Major 4 correction.  We are only at the beginning with 3% already down.  I'm going to take the risk and start buying at 1580 and below.  Because, i think this is how deep we'll go.  Or more? 

Week Aug 19th:

I bought some longs on Monday as i think the S&P will bounce a bit upward.  Today, my UPRO and SPXL gave me a 1.2%.  In my 401k, i'd bought Goldman Sach's Small Cap Value.  I should have around 1.5% gains by tomorrow.  I'm only invested around 20% all together as this bounce will be short lived.  After that, we should continue the decline and i'll be ready with my short positions.

My trading strategy and gains:

401k = 16.3% up YTD (33% invested on small caps).  Projection by end of year is 24%
Brokerage = 18% up YTD (15% invested on triple long ETFs)  Projection by end of year is 28%

401k

I talked to a friend last night (I won't say his name for privacy purposes), but we talked about how to allocate a 401k.  The best way to allocate a 401k is to spread your investments in all allocations.  I allocate my 401k differently because i've done this for several years already and i'm familiar with the changes and trends of the US markets.  But, if you are just getting started it you should start with a different approach.  You should "diversify".  It is written on every book about investing and any financial adviser will tell you the same.  When you diversify, you are spreading your investments on safe and risk accounts.  A typical 401k breaks down like this:

Safer: Money Market Accounts:

Safer with little risk: Bonds, Fixed, Mortgage

Medium: Balanced allocations, Large Caps

High: Small Caps

Higher risk: International, Emerging markets

So, you need to spread them out on all of them.  You will make and loose money, but that's how you start.  You will never make money without loosing.  I had a -2% on one of my accounts YTD one time.  This year i have 20% YTD already on that same account.  I've watched my 401k account since, who knows 2001 i think.  I've seen my account in ups and downs many times.  But no more.  After all this years, i can manage to get positive gains YTD.  Last year, i got around 13% YTD on my 401k.  This year is up 16.5% YTD.  My plan this year is to pull a 30% + if possible on my 401k.  We'll see.  I will post more stuff later and how to do it.  Because, know one will tell you when you should take your money out or put you money in when the US rocks or goes to recession.  Did anyone tell you when to sell your house before the housing market broke down in 2008-2009?   

Let me suggest some stuff to get you started.  I had read them and i recommend them to you.

Real Money by Jim Cramer

5 Waves to Financial Freedom by Ramki Ramakrishnan

Read your 401k allocations and call them.  It's free to talk to your 401k advisers.  

Watch Mad Money

Will post more stuff later.  

401k's and Brokerage Accounts

Well, i'm pretty happy today.  I sold all my ETFs (Exchange Traded Funds) and got a 17% gain in a 2 to 3 weeks period.  Really amazing stuff!

Back in late June, i bought the UPRO, SPXL and TQQQ.  They are 3 times bull S&P ETFs.  This means that if the S&P (and if you read my previous comments about what the S&P stands for) went up 6% in 2 to 3 weeks, you make 3 times of that percentage.  It is one of the riskiest investment strategies out there because if it turns against you, you'll want to pull your hair out and cry.   So, I sold these shares today and got a nice profit of 17%.  Now i'm watching the after market data after Ben Bernanke's speech and the markets are rocking again!  I got so close to stay in but i did sale my shares because you can't get too greedy in this game.  You get too greedy and you can loose some.

Now, let's talk about some of the beauties of investing:  401k and brokerage accounts.

Brokerage accounts: They are your best "checking account" if you are an investor or future investor.  Forget the damn checking accounts and savings accounts at the banks..  They are a bunch of scheme accounts from the banks and other institutions promising a misserable .0001 % rate of return.  Set up an brokerage account!  This is what i can do with my account and just found out a few months ago.  You can put money there, let's say 10k and they'll match 100% if i want to borrow money at a 4% APR to invest!  Is that nice?  How much is a credit card APR's?  15, 20, i heard of 27%.  Now, you can't take that matching 100% to spend but you can take your own cash out, let's say 5k and you will still have 10k all together with the left over 5k + the matching 100% = 10k still invested.

401k:  You get exposure to many allocations:  bonds, mortgage, small caps, large caps, international, Europe, Asia and many more.  If you think China is going to rule the world, you buy International Emerging Markets allocations (see you company's 401k).  If you think US will keep rocking, you buy large and small caps.  Now, one of the best freebies from a 401k is your companies match to your investment contribution per year.  Free money!!  I get a 25% match.  There are other lucky ones with an 100% match.

I'm invested on both brokerage and 401k accounts.  You should give it a try.  They are great tools to have and start as early as possible.  It takes some years to get this stuff.  First strategies are to be diversified in your 401k accounts and playing it safe.  Once you start getting the hang of it, you can try the brokerage accounts.

Oh, and by the way, Virginia 529 sucks.  You can only move your money once a year!!!  The tax incentive is not that great than that of 401ks with the ability of moving your allocations more times per week, or month.    My 401k is with Principal and it let's me buy and sell once per day.  Oh i forget!  If you are a first time home buyer : ) use that honey to buy a house!  Free of tax penalty!  Unless the government changed this rule.   : )

Laters.
P.

Will the US go in to recession again?

Will we go in recession again?  This is a question many wonder if a recession is likely to come again.  Well.  The answer is yes!  

Last week, i went to my friend's Vic house for a bbq and over a couple of drinks the question came up.  I want to clarify how i think a recession will come and when (or better in what time frame i expect this to happen).

Historically, the US economy has had many ups and downs (recessions).  Look it up and you'll see that in the last century, the US economy or the US markets, have gone through more than 8 or 10 recessions if i'm not mistaken.  Every time before we went to a recession, a number or 3 to 6 years of good strong years in the US markets have taken place.  We are currently in a 4th year of strong US market upside.  Yes!!  Believe it or not!  Strong US market and somehow stronger economy.  Why? How? Well, is all about injecting money to the economy.  Yes! Making money out of thing air and put in it to work.  The FED invest or buys bonds and mortgage securities when the markets are low (cheap).  Once this happens, smart money people or entities (hedge funds, big companies with money = Wall Street) do the same.  They buy and invest in markets and markets go up.  Then, after things get better, the individual investor (Main Street) puts money in.  

Now, what happens after the FED's stops putting money?  What happens when Wall Street and Main Street stop and pull their piggy banks out.  The answer is: fear is on.  Everyone pulls their money out and a "top" on the markets (long term speaking) is called.  

Unfortunately, once this "top" is in, the regular investor, the public, and most people won't know this.  After a number of 3 to 12 months, a recession "the bottom" is reclaimed.  Historically, and as far as i remember, recessions have lasted 9 to 18 months.  The Great Recession of 2008 to 2009 lasted almost past 2 years!  

So, based on what i said and with my resources - and we can call it guessing too : ), the US markets or US economy will bubble up and pop by late 2013 through mid 2014.  The decline will last again either 9 through 18 months and the financial mongers will start come out of their holes claiming that the US is going down and China will take over the world hahaha.  

So, the new recession will be called in 2014 through 2015.  There it is!  If i'm right, you'all better send me a check for my commissions or for saving you money : )  The FED will stop pumping money soon, housing will react and go sideways (we hope), smart money investing (Walls Street) will take out their money in order to cash out and celebrate all these 4 years of money making and the regular public, consumer spending, discretionary spending, consumer sentiment will drop.  

Just remember this: what ever goes up, must come down.

But, no worries!! after 2015 or 2016, United States will rally and kick ass like a champ for many years.  Then, we will start a new era where people will want to come to live the American dream again.

I'll explain how this may happen later.  Just a hint:  Energy boom.  The new United States of Oil and Energy of America (i hope too)

Pepe

-- This is Market Analysis, not a recommendation.

My Comments of this Recent Market Week at a public blog

1. JosephApril 13, 2013 at 11:09 PM

   OK. I missed calculated the top and lost half of my ytd gains by trying to short the markets. For the meantime, this event has tought me that shorting against a bull market and calling a top is too risky since they are 2 powerful forces you should not bet against when they are together. For now, I'm going to sit on the side and be patient and disciplined. I will wait for the next intermediate bottom and buy in increments as the markets decline. Buy the dips. I will then wait for the markets to rally and make lots of gains as I will be buying triple etf funds to ride the way up the hill in May. In the markets, the only way to make money is by making decisions with probabilities. And now I fully agree with the saying that the trend is your friend.

   Reply
2. 
   NaqviApril 13, 2013 at 11:59 PM

   Hey Joseph. Good comment. Trend is the only friend one should have in this market. Market tends to deceive the majority with its cunning ways. However, if you trade with the trend you are more likely to get bailed out on a wrong entry vs if you enter against the trend.
   
   However, always keep in mind that any counter-trend move can turn into a new trend or new bear market, under the right circumstances. In other words, when majority of investors get confortable with a direction of trend, it reverses. Therefore, one should keep this possibility in mind.

   Reply
3. 
   JosephApril 14, 2013 at 12:55 PM

   I agree. But, it's a risk I'm willing to take. It is the probability of the us markets topping and bottoming at the intermediate term level. And with the probability that spx will reach 1650 or more by the end of this year.

Standard and Poor US index

Well.  This time i'll write in english.  And pardon me for my grammar : )  (like the song form Incubus "Pardon me while i burst"?  I think this is what they say :)  Anyway, its just late and i don't know what i'm saying.  haha.

Let's talk US market stuff.  I follow the Standard and Poor index everyday.  And i have followed it for the past 5 to 6 years.  Every year i read and analyze more and more about it.  The S&P market index is one of the most followed index in the world.  It's a combination of 500 mostly US companies that have a lot of exposure to the american consumer.  And some international too.  When ever the american consumer spends money, the S&P 500 makes some gains very often.  If you were going to go back and search some stats of the S&P, you would notice the S&P rallied several times during the Christmas seasons.  Why? because it is the time of the year where most people spend money to buy gifts and others.  

So, now you get an idea of what the S&P is but you can always google it.  At this time, what I am doing is researching for other seasonal and historical moments of the S&P tops and bottoms, moves to the upside and downside, crashes and other behaviors of this index.  Yes, behavior.  The S&P moves accordingly to human investor psychology.  Not the human psychology, but the human investor psychology.  It is very interesting what i found and i will share this with you all sometime.

P. 

Bolsa de Venezuela

El presidente Chavez fallecio ayer como ya lo deben de saber.  Bueno, no le deseo mala suerte o que mal por el, pero si que jodio mucho a su pais.  Lei un articulo en CNN que desde que Chavez anuncio su enfermedad del cancer en 2011 el stock market de Venenuela subio como cohete hasta ahora.  Subio 300% en solo este corto tiempo.  No suena nada mal.  Cada vez que se escuchaba malas noticias de Chavez parece que la bolsa de valores de Caracas aumentaba en valor.  Lamemtablemente, como extranjeros que somos no podiamos invertir ahi.  No que yo fuera a invertir pero como hubiera sido...  hmm. 300% wow!!  Estaria pasandola en alguna playita con la family.  http://money.cnn.com/2013/03/06/investing/venezuela-stock-market-chavez/index.html?iid=HP_LN

P

For english plesase use google translate

Hola a todos.  Estoy creando un blog a cerca de finanzas, economia, y otra cosas interesantes.  He encontrado esta area de economia global muy facinante que estoy pensando en compartir con uds.  Saludos a todos mis amigos y familia.

P.

For english plesase use google translate