I had promised that I was going to start my own thread regarding stock investments and the markets. So many things have happened since last time I was here and I really do not feel like sharing my knowledge. But a promise is a promise and there have been few people that have emailed me and supported me.

This thread will deal with investing in the stock markets. I will not discuss individual stocks but discuss ETFs like SPY, DIA, IWM and QQQQ. The one good thing about trading ETFs compared to individual stocks is the the ETFs provide instant diversification among similar companies within the same sector.

I will post more as we go along, regarding entry-price, profit-target and stop-losses. I do not think that any ETF is good or bad. It is good only if I'm making money and bad if I'm losig money.

If you have not been in the market so far, please read this as an information piece only rather than my recommendations. There is risk involved and you should know how much risk to take on any position.

Any suggestations, comments and criticisms are welcome as long as it is market related. If this thread gets out of hand and we start discussing off-topics, I'll stop posting.

Have a happy new year!!!! May 2007 bring you and your family lots of joys and riches.

We're seeing lackluster perormance on the IWM(the i-shares Russell 2000 ETF, which tracks the US mid-cap stocks). The Mid-Caps have been a major force behind the surging market gains in recent years and we're seeing some support, albeit weak.

I'm not gonna trade untill I get some strong confirmation that we are indeed moving up (both in IWM and S&P 500)

1400 is the mst important level right now for S&P 500 and 12750 for the Dow (which has been the most important level for months now) If we look at SPY (the ETF that traks the S&P 500), we see decreasing volume since market highs in july 2007 and again in october 2007. Decreasing volume with lows signifies that the sellers are running out of inventory to sell. I think that the probability of a bounce back is higher this week and the one after but not necessarily a solid one.

Emini is a seasoned trader. For the rest of us, we need to stay calm and only start buying when we see a solid trend at hand. The trend is your friend.

And Aman, you really shouldn't have bought Intel. I'd get out of it. Never put more than 5% of your money into one stock. I've made the mistake of putting larg fractions of my money into a single play and paid dearly.

for Team Player: Averaging down is FOOLHARDY my friend. Follow Emini's advice. no matter what anyone says, it's NOT GOOD PRACTICE.

Good to see this thread alive again.

Happy trading everyone!

Wooooooooooo Blood in the street and Tech stocks Brutally murdered !

My protfolio is bleeding too heavily...almost 5% to 33% down

All of my gains are being erased rish nai uthi sakayoo vanako

I have been out of the market for past 2 months.. In retrospect, I think it was a good choice.. I knew this was coming but just couldn't point out when and with no way of shorting the market ( I don't have margin account open), I decided to get out of market. I put half of my money in the Money market and half of it is still in the brokers account. So, just crusing with ~2.5% return. Not bad I guess.. but soon I might jump back in if I see the change in the trend and try to invest on some larg cap stocks.. lets see what happens.. I am just a spectator - for right now..

follow the trend.

I haven't seen things being this ugly........ I tried buying some today but when things did not pan out, I got out. No point trying to catch a falling knive. One of the things that I have mentioned over and over was to cut positions as we see a 1% selling day. There are times when the market still goes up after that and you feel terrible for getting out but there are other times when it does not go up and you feel good. It certainly looks like things are getting worse before they get better.

I have few other observations that I will be sharing in the future. I'll show you how to get started, where to find information for free and similar things. Save your money and when the bull market resumes, be prepared to make money. Don't worry if you do not know how to short. Most of the people lose shorting anyway. When I short, I take my profits fast. When I am long and if the position is making money I hold on to it, if it is losing money I'm gone.

15000+ views is not too bad considering that I did not update for almost 6 months.

 

 

 

 

INTC- I think should go up before earning on Jan 14 because AMD is losing market and its 75 % market is outside of US. I bought at bad timing but it needs fall to learn.  What about recession? How low indexes will fall in such case before settling? any idea.

You can't tell aman.

That's where large funds have some issues but these guys use hedging strategies such as options and futures to maintain capital during times of crisis and even they sometimes cannot completely be spared the market. You simply cannot beat it.

This is where small investors like us have an advantage. We should be able to monitor things regularly without much hassle as our positions are smaller and we can get in and out of positions relatively quickly than these large funds, provided u have liquid stocks.

Recessions are most properly defined as when "GDP declines for 2 or more quarters". So the stock market may have these kinds of corrections even though the GDP output is still positive and increasing. However, due to transparency of economic figures, the stock market usually factors those economic effects very quickly and is usually reflected in the price as is the case nowadays:

1. the subprime crisis has impact on GDP

2. war on iraq

Now I'm not an economist but how much an index will fall is always hard to tell. The index does not fall all the way till the end of a recessionary period. The market factors that in right away. And looking at current levels, I think if the S&P 500 breaks the 1400 level even further, we're in for a surprise.

SO HOLD ON!!!!

 

 

and kudos to Emini, this really is a good solid thread!

No one knows how big of the fall the market will have to endure.. To tell you guys the truth, I have stopped listening to all those bull craps from stock pundits. I look at the data myself and try to formulate my own idea.. I do read some articles to test my therotical consistnecy.. thats about it.. Cramer and all those financial heavyweights would have been really helpful if they were whispering their words in your ears but bear in mind that thousands of other ppl are watching the TV at the same time all all those advice looses its relevance.. Do your own research.. formulate your own theory.. no one can time the market perfectly.. as Timetraveller mentioned above.. Trend is important not some specific number

I think good company's come back to its high price after some good news. so when you invest in good company  in a dip there is more probability that price will recover after some time.

Aman: Good companies do make new highs but only when the market is good. Say if you had bought INTC or CSCO in 2000, you'd still be losing money even after this good rally for the past 5 years.

Today's rally towards the end of the day looked promising, I am a little hesitant but I think this market still have some room to go up. If we can hold at this level, we should see some rebound.

Here is my pick from last week..... ACH.......Take a good look at this. As always do your own research.

I wonder whats the relationship betwen Gold and these aluminim and other mining stocks from Asia. and I'm also waiting for those solar stocks to make a comeback.

But the interesting thing with ACH is the very low short-ratio. While I dont completely rely on that, the price action seems pretty sad for now.

I'm not for picking bottoms. Like always, the trend is my friend.

TT

It seems the correction is done. Too many people waiting for a crash to happen. I bought some today, will add more if the market shows strength tomorrow. Fed will start cutting rates to avoid any recession.

Mark my words right here.. I think recession is already here.. has been here for at least for last 2-3 months.. I will post some supporting data shortly

o_o:   We could very well be in a recession, but I am trading a system and when it tells me to buy, I buy. I always know how much I'm going to risk and if it goes down by that amount I get out. So far it has been working for me. I'll be interested to see some of the supporting data that you mentioned. There are very few people that have been able to predict recession. Most of the time it is known only way after it happens.

It sure looks like market is trying to move up. But the Fed is not going to cut interest rate before next FOMC meeting of Jan 30-31. So, market trend is going to depend very much on corporate earning reports for next 2 weeks. There are no great expectations from earning reports this season but what if corporate earnings underperformed the already 'low' expectations!!!  Furthermore, i think, cutting interest rate is not going to be sufficient to correct the increasing credit crisis.

Whatever be the situation, i am in the market for now.

Emini, do u have any idea why Nasdaq is underporming lately?

Is this all because of decreasing consumer spending and grim economic outlook?

I just hope the Canadian government cuts the rates by 5- basis points too. We're abt to buy a home and it would help.*grin*

As for the US, 50 basis points seems not so far away.

and the S&P has been testing th 1400 level for several days now. It has in the past year as well. A break below this and I'm just relax for abt a year.

Also notice the spread widening in the 10 year and the 30 year yield. The blue one is the 10 year and the black one is the 30 year yield.

The two I've noticed generally move parallel to each other with a spread.

We're also approaching historical lows in both cases.

 

Staying long here. Will exit if the S&P closes below 1385.