Saturday, April 8, 2017

Is The Market Going To Top Out in 2017?

The chart above is the Ratio Adjusted Summation Index ($NYSI).  The $NYSI, which is a great tool to measure the strength of a Bull Market, is calculated by adding the daily values of the McClellan Oscillator. Readings above 500 convey the message that we are in a Bull Market and will continue to make higher highs.

However, over the last year a bearish divergence has formed. As the Market continues to go higher, the $NYSI continues to trend lower (shown on the chart above). Thus, this indicator is signaling a potential significant top looming for the Stock Market.

Unfortunately, what this indicator does not tell us is the timing of such a top. A significant pullback could range from days to months from now. That type of information is better left to other indicators such as RSI, the VIX or perhaps Bollinger Bands.

Regardless of timing, this indicator is telling us the risk of investing/trading in this market has greatly increased via negative divergence. Trade and invest with caution!

Sunday, March 5, 2017

The Stock To Buy On A Market Pullback

NVDA Stock Chart Technical Analysis Nvidia

Nvidia ($NVDA) had an amazing year in 2016. Not only did the stock gain massively, it did so in a parabolic fashion (refer to weekly chart above). These types of moves are rare and often signal massive strength for years to come. For example, refer to Tesla ($TLSA) in 2013, as well as Apple ($AAPL) in 2012.

Parabolic moves are often followed by violent pullbacks due to the fact that these stocks tend to be very overbought. However, once the overbought condition is alleviated these stocks tend to go straight back up. That is why I recommend investors/traders pay attention to Nvidia, it's in the process of pulling back.

Saturday, January 28, 2017

Ten Signs You Are Probably A Terrible Trader

Over 90% over traders will end up losing money in the stock market. Chances are if you are reading this you are probably loser in the Market. In order to encourage you to quit before you lose all your money, I created a list below to make you realize you are terrible at trading and should probably find another dream to pursue.

1) You follow "professional" traders on twitter. The truth is many on twitter are complete phonies and have built a fake trading persona to end up selling you something in the end. More on this can be found on my guide on how to identify fraud traders.

2) You look at inspirational quotes or quotes given by "famous" traders as part of your trading regimen. This is non-sense, this won't help you.

3) You assume psychology is a major part of trading, much more than an actual system. As such, you constantly remind yourself that you lost money in your last trade because of psychological mistakes and thus you refer to #2 on the list to regain focus (stupid trading quotes). If psychology was such a big part the simple solution would be to write programs that would trade for you (this isn't a money maker). The truth is, many "professional" traders instill that psychology is big so that they can sell you their products for improving your "weak" psychology. Just to be clear I am sure most of you lack discipline, but even with discipline you still would lose money.