Today, I want to share one of the most important charts I reviewed this weekend.  It’s a daily chart of Lyft (NASDAQ: LYFT). And yes, it includes relatively little information. But the story that small amount of information tells is big.  That’s because, just 10 days after the first trade, the stock fell as much as 20% below its offering price. Take a look… As Lyft was falling, its rival Uber announced plans to begin trading at a valuation of $90 billion to $100 billion. That seems steep for a company that’s yet to earn a profit on operations, but… Read More

Today, I want to share one of the most important charts I reviewed this weekend.  It’s a daily chart of Lyft (NASDAQ: LYFT). And yes, it includes relatively little information. But the story that small amount of information tells is big.  That’s because, just 10 days after the first trade, the stock fell as much as 20% below its offering price. Take a look… As Lyft was falling, its rival Uber announced plans to begin trading at a valuation of $90 billion to $100 billion. That seems steep for a company that’s yet to earn a profit on operations, but it’s well below the $120 billion the company expected to be valued at as recently as November.  These two stories indicate that investors are wary about the rush of initial public offerings (IPOs), which can be a sign of a market top, as I wrote about a few weeks ago.  #-ad_banner-#You might remember that I shared research from the paper “Using IPOs to Identify Sector Opportunities” by Kevin Lapham that showed IPOs can point to tops in sectors. Lyft, Uber, and other IPOs are being classified as “tech stocks,” and that indicates it’s time to closely follow the NASADQ 100… Read More

On a chart of the S&P 500 Index, the 2,800 level is becoming increasingly important. This level served as resistance for months — and now it’s support.  For those who are unfamiliar, resistance is a price level where selling pressure is expected to increase.  —Recommended Link— I’ve Never Been More Excited About An Opportunity Pot stocks are dominating the headlines. But I’m not biting. Because I’ve found a safer, smarter way to make money from the legal marijuana market. It’s a unique profit-sharing plan that’s allowing everyday Americans to earn up to $55,563 a year. Read More

On a chart of the S&P 500 Index, the 2,800 level is becoming increasingly important. This level served as resistance for months — and now it’s support.  For those who are unfamiliar, resistance is a price level where selling pressure is expected to increase.  —Recommended Link— I’ve Never Been More Excited About An Opportunity Pot stocks are dominating the headlines. But I’m not biting. Because I’ve found a safer, smarter way to make money from the legal marijuana market. It’s a unique profit-sharing plan that’s allowing everyday Americans to earn up to $55,563 a year. And the payouts are 100% backed by a U.S. Federal Law. The next check run is just days away. Get the full details here now.   As an example, we can look at how traders could have been thinking about the market in December 2018.  Back in December, as prices moved toward 2,800, nervous traders would have noticed that rallies had stopped at that level twice in the weeks prior. They may have decided that, if prices reached that level again, they would sell. Aggressive traders might have decided they would open short positions at that… Read More

I’ll admit that I haven’t read many of the great works of literature.  Even though I read a great deal, almost all of my reading is related to the stock market. (Hopefully, there will be time to read more literature when I retire.) But sometimes, the two intersect in unexpected ways, and I find myself benefitting from the works of great authors.  I frequently find myself thinking about quotes that others consider to be important and symbolic of the work. One quote many personal finance writers like to share is from Ernest Hemingway’s classic “The Sun Also Rises.”  “How did… Read More

I’ll admit that I haven’t read many of the great works of literature.  Even though I read a great deal, almost all of my reading is related to the stock market. (Hopefully, there will be time to read more literature when I retire.) But sometimes, the two intersect in unexpected ways, and I find myself benefitting from the works of great authors.  I frequently find myself thinking about quotes that others consider to be important and symbolic of the work. One quote many personal finance writers like to share is from Ernest Hemingway’s classic “The Sun Also Rises.”  “How did you go bankrupt?” Bill asked.  “Two ways,” Mike said. “Gradually and then suddenly.”  #-ad_banner-#Now, I am certain there is a great deal of context I’m missing, and that’s a side effect of not reading the book. However, even without context, this quote is striking because it describes a process that applies to almost everything.  When we boil water on the stove, the temperature appears to change “gradually and then suddenly.” When a child is getting sick, their behavior seems to change “gradually and then suddenly.” When someone struggles at work, their performance often seems to change “gradually and then suddenly.” … Read More

In case any investor needed a reminder about the importance of value, we can look at Lyft’s initial public offering.  Last Friday, Lyft began trading to great fanfare. It opened significantly higher that day, delivering large gains to some of Wall Street’s biggest investors. That’s how IPOs often work.  #-ad_banner-#​How IPOs Work In an IPO, in general, we can say that the company sells shares to Wall Street. Specifically, early investors in the company and insiders are selling shares to large Wall Street firms. The sellers are doing so, at least in part, because they want to cash out. Read More

In case any investor needed a reminder about the importance of value, we can look at Lyft’s initial public offering.  Last Friday, Lyft began trading to great fanfare. It opened significantly higher that day, delivering large gains to some of Wall Street’s biggest investors. That’s how IPOs often work.  #-ad_banner-#​How IPOs Work In an IPO, in general, we can say that the company sells shares to Wall Street. Specifically, early investors in the company and insiders are selling shares to large Wall Street firms. The sellers are doing so, at least in part, because they want to cash out. This indicates the company is potentially overvalued.  Initial buyers of the stock receive their shares after the close the day before the stock begins trading. They are large customers of the firms handling the IPO. There are two reasons for that…  One is simply efficiency. It’s easier to allocate shares to buyers asking for hundreds of thousands of shares than to individuals asking for less than 100 shares.  The second reason is based on the fact that the share price is expected to rise when trading starts. Investors who got their shares the day before will enjoy an immediate gain. Read More

If you watch CNBC, you’ve probably heard an analyst say something along the lines of…  “The time to buy is when there’s blood in the streets.”  Essentially, this means that bad news can be a buying opportunity.  #-ad_banner-#At times, that philosophy is correct. But it’s often better to wait for the impact of the bad news to become clear before buying. That approach explains why I recently told my Profit Amplifier readers that my indicator tools have a “buy” signal on mining giant Vale S. A. (NYSE: VALE).  VALE fell on catastrophic news in January when a dam maintained by… Read More

If you watch CNBC, you’ve probably heard an analyst say something along the lines of…  “The time to buy is when there’s blood in the streets.”  Essentially, this means that bad news can be a buying opportunity.  #-ad_banner-#At times, that philosophy is correct. But it’s often better to wait for the impact of the bad news to become clear before buying. That approach explains why I recently told my Profit Amplifier readers that my indicator tools have a “buy” signal on mining giant Vale S. A. (NYSE: VALE).  VALE fell on catastrophic news in January when a dam maintained by the company in Brazil collapsed and killed an estimated 300 people. Dams are commonly used by miners to contain waste products, and Vale has more than 130 dams in Brazil. The company is now working to replace older dams with safer technology.  The collapse was absolutely a tragedy, and I do not want to minimize that fact. Vale will work with authorities and victims to resolve claims and address other concerns, as it should. However, my goal in Profit Amplifier is to recommend the best available trades with the highest potential, and VALE’s stock is giving a “buy” signal.  The… Read More

As my last days in the military drew near, I was not concerned about money at all. Unlike some of my colleagues, I had a good plan in mind on how to make money as a civilian. I had already been able to supplement my income while in service with a little known area of the stock market. Once I “got” what I’m about to share with you, a new income stream immediately started supplementing my military income by 10% — while in the middle of a war zone with very limited time and enormous stress. As soon as I… Read More

As my last days in the military drew near, I was not concerned about money at all. Unlike some of my colleagues, I had a good plan in mind on how to make money as a civilian. I had already been able to supplement my income while in service with a little known area of the stock market. Once I “got” what I’m about to share with you, a new income stream immediately started supplementing my military income by 10% — while in the middle of a war zone with very limited time and enormous stress. As soon as I left the military, I not only replaced my income, but I exceeded it by 30%. And both my income and net worth continue to grow to this day, thanks to this often misunderstood area of the market. —Recommended Link— If you could hack the stock market and get away with it, would you? Here’s how one experienced hacker did it… with easy instructions showing investors how to do the same. ​Click here. I don’t want to beat around the bush or make this sound like some super-secret investing strategy only I can tell you about… I am talking about… Read More

I want to take a moment to highlight what’s going on in the broader market.  Right now, the market is at an important turning point that could determine the direction of the next big market trend.  Just check out the chart of the S&P 500 below, which also shows important support level at 2,800 (marked in blue).  Now, I know many investors ignore technical analysis, but there are many investors who follow important technical signals. And when enough large investors react the same way to the same technical signals, those signals become important.  #-ad_banner-#One technical factor that tends to be… Read More

I want to take a moment to highlight what’s going on in the broader market.  Right now, the market is at an important turning point that could determine the direction of the next big market trend.  Just check out the chart of the S&P 500 below, which also shows important support level at 2,800 (marked in blue).  Now, I know many investors ignore technical analysis, but there are many investors who follow important technical signals. And when enough large investors react the same way to the same technical signals, those signals become important.  #-ad_banner-#One technical factor that tends to be important to traders is the law of round numbers, which gets mentioned in a number of books written in the first half of the 20th century. One of the books that mentions round numbers is “Reminiscences of a Stock Operator,” the 1923 classic that sits on the desk of many Wall Street traders.  In the book, traders are advised to watch round numbers, and when a decisive break occurs, the trend is usually well established. In the chart, 2,800 is a round number and the blue line shows that prices stopped advancing at that level three times at the end… Read More

There are two big stories to watch in the stock market right now. One involves the Federal Reserve… …and the other involves Lyft, Uber, Pinterest, and other tech companies expected to complete initial public offerings (IPOs) in the near future. First, let’s look at the Fed, which recently announced some changes in their outlook. Story #1: The Fed Just three months ago, their forecast indicated we should expect two more interest rate hikes before the end of 2019. Last week, that changed, and the forecast now is for no additional rate hikes this year. Read More

There are two big stories to watch in the stock market right now. One involves the Federal Reserve… …and the other involves Lyft, Uber, Pinterest, and other tech companies expected to complete initial public offerings (IPOs) in the near future. First, let’s look at the Fed, which recently announced some changes in their outlook. Story #1: The Fed Just three months ago, their forecast indicated we should expect two more interest rate hikes before the end of 2019. Last week, that changed, and the forecast now is for no additional rate hikes this year. That indicates the Fed believes the economy will slow, and their forecasts for economic growth confirmed that. GDP is now expected to grow 2.1% this year, a cut of 0.2% from the December forecast. The Fed also announced changes to its plans for drawing down its balance sheet. During the financial crisis, the Fed’s balance sheet increased from less than $1 trillion to more than $4 trillion. In the past year, they have been selling off assets to bring the balance sheet down to a normal level. They had been selling $50 billion worth of securities a month. Read More

Many traders ignore seasonal patterns, simply because they’re based on the calendar.  But I’m here to tell you that seasonal trends are important, and there’s a particular one that I want to highlight this week.  To find a seasonal trend, an analyst calculates how prices performed on a certain day in the past. For example, we know that since 1950, March has been an “up” month for the S&P 500 64% of the time. Since there’s normally about a 59% chance of an “up” month, that’s a slight seasonal bias to the “up” side.  However, that’s not really a tradable… Read More

Many traders ignore seasonal patterns, simply because they’re based on the calendar.  But I’m here to tell you that seasonal trends are important, and there’s a particular one that I want to highlight this week.  To find a seasonal trend, an analyst calculates how prices performed on a certain day in the past. For example, we know that since 1950, March has been an “up” month for the S&P 500 64% of the time. Since there’s normally about a 59% chance of an “up” month, that’s a slight seasonal bias to the “up” side.  However, that’s not really a tradable seasonal pattern because it doesn’t offer a very strong signal. An example of a strong signal would be one that tells us there is a 75% chance for a market gain in the next week, or if the probability of a gain in the next week is significantly below average.  …which is exactly what the charts are showing us right now.  For the next two weeks, seasonals are weak and that tells us to expect a pullback in the broad stock market.  There are several ways to look at seasonals. Two of the more popular techniques are shown below in… Read More

The ongoing situation with Boeing (NYSE: BA) is important for investors to watch.  As you probably know, on Sunday, March 10, a Boeing 737 MAX 8 aircraft crashed just six minutes after takeoff in Ethiopia, killing all 157 passengers and crew aboard.  Authorities have begun investigating the cause of the crash, which was the second crash involving that particular model within the span of several months. In the meantime, a number of countries issued orders to ground the Boeing model, with the U.S. following suit on Wednesday.  Safety concerns about the airplane maker’s 737 MAX aircraft are a tragedy, and… Read More

The ongoing situation with Boeing (NYSE: BA) is important for investors to watch.  As you probably know, on Sunday, March 10, a Boeing 737 MAX 8 aircraft crashed just six minutes after takeoff in Ethiopia, killing all 157 passengers and crew aboard.  Authorities have begun investigating the cause of the crash, which was the second crash involving that particular model within the span of several months. In the meantime, a number of countries issued orders to ground the Boeing model, with the U.S. following suit on Wednesday.  Safety concerns about the airplane maker’s 737 MAX aircraft are a tragedy, and I don’t have any intention of minimizing them. And we don’t have a clear idea of just how much this will affect Boeing just yet. But from an investment perspective, history shows that problems in a single company can spark a significant decline in an overvalued market. Let me explain… #-ad_banner-#Historic examples include the October 1989 market crash that followed the collapse of a leveraged buyout deal for United Airlines. That crash was small, with the S&P 500 falling a little more than 6% that day, but the deal’s collapse showed traders that buyouts were risky. The news pushed prices down… Read More