Gold May analysis - recent run up !

After my last Gold technical analysis in April gold has a run up.


Market club's monthly and weekly signals had given a buy since the 90 and 89 levels respectively. This may be mainly due to inflation concerns. 99 might be one big resistance that GLD needs to pass through.

RSI has reached around the overbought area but MACD is showing good promise. Going by last times runup ultimate top was formed when both MACD and RSI were at top.


Buy in next dip might be the right thing to do here?

Where is WallStreet headed? Commonly asked questions

Everyone's cheering the upward move in the DOW, S &P and NASDAQ markets in the last few weeks.

There have been various theories as to what could happen next with the market and how long will this continue. I found a few which I can highlight here:

After a spectacular rally from the lows seen last month, the S&P, the DOW appears to be running into overhead resistance.

Click here for the video.

Investor Sajal has highlighted few key points in his blog in Seeking Alpha. Analysts are making different kinds of predictions from this being a bear market rally ready to loose steam or beginning of a new bull market to a bear market rally that will suck in more traders.

Mick Weinstein gives us a good summary at yahoo finance .

The coming few weeks are earnings weeks which is where the market swings in different directions in one-two day intervals.

In my opinion we will see some back and forth in some target area until earnings season is over. The direction of the market will be decided once the earnings season comes to a halt.

Thoughts?

Finance movies anyone ?

If finance or business interests you, then probably you can relate to some movies that cover these topics. These Hollywood movies range from comedy to serious and depict how money can change lives.

1. Trading places: A rich guy and a poor guy end up swapping their positions in the game of finance. Watch Eddie Murphy and Dan Aykryod in this funny 1983 movie.

2. Office Space: This one brings the office to the movie theater. Tech programmers can relate most to this silicon valley comedy.

3. Wallstreet: This is about a WallStreet stockbroker who wants to get to the top by using both legal and illegal methods.

4. Rogue Trader: Ambitious, Nick Leeson finds himself as a futures option trader in this 1999 Hollywood movie. I have not yet watched this one. Any reviews?

5. Lost in America: Money Magazine brought this to my attention. Have not seen this movie yet . This 1985 movie depicts the life of a couple who start on a journey and lose their nest egg.

Do you have more to add to the list?

April Gold technical analysis - is Gold confused?

After my GLD technical analysis in March I decided to take a look at GLD again.
Here is MarketClub's analysis.


Monthly indicator is bullish but weekly and daily are negative.

After being in an undecided territory GLD started its downward spiral making its earlier support now a resistance line.
Using some Fibo and Elliott wave theories I would guess the downward spiral might be of similar length given the one from 98- 89.
If the length of current decline is the same as the one before we would expect ten basis points from 94 which is around the 84 level before some rally.


RSI indicates oversold, MACD is in bearish territory for right now and volume is down. Need some volume to pick up upward trend. Thoughts ?

Tax time for gold or silver

If you have enjoyed GLD or SLV gains in 2008, you might have had a tough time with reporting the taxes. GLD or SLV lists some monthly sells that it passes to shareholders.
They are also referred to as WHFITs (Widely Held Fixed Investment Trusts).
If you are using any software like Turbo Tax and use auto login's to your brokers website all of the above are listed as gains and added to Turbo Tax.
The issue is its difficult to list cost -basis and hence SPDRs shows how to report the gains. Please see here for details on reporting GLD.

PS: I am not a tax advisor/consultant. Please contact your tax advisor for details.

Some great shopping deals and sites

I have been a fan of Fatwallet for quite some time now. Recently came through some good deals surfing around the site.

1. Cash back opportunity: Some participating stores offer cash-back if items are purchased via fatwallet. Common names are HP , Sears, hotels.com , etc. Fatwallet collects money in your account until a certain sum is earned and can then mail you a check. Recently while shopping for laptops I found this deal for HP. A 6% cash back for a $600 laptop amounts to around $36 of cash back. Not bad huh !
There are other sites like ebates.com that also offer cash backs.

2. Lending club is offering free $50 for opening an account. Lending club is an online peer-peer lending site.

3. Bank of America offering $50 on opening a new account.

4. When you sign up for veggie club in Sweet Tomatoes you can be eligible for a 15% discount while dining at Sweet Tomatoes. As I mentioned in my earlier post on Sweet Tomatoes have been known to occasionally send "buy one meal and 2 drinks and get the second meal free". I have been knowing of these deals for some time. This is not one I found through Fatwallet.


Please note that I have not personally verified #2 and #3 above.

Besides the above fatwallet lets you subscribe for alerts by entering keyword(s). For example if you are looking for a shredder you can request fatwallet to send you notification if anyone submits a new deal for shredder.

Other sites which are welknown in the world of deals are techbargains.com and slickdeals.com.

Gold technical analysis - different views

Recent change in Gold price surprised some individuals who were basing their theories on pure tech analysis. Agreed that the gold chart was forming a wedge or trying to make a decision but this time the move was mainly in the up direction due to the recent news of some inflation starting to pour in the market.

Here is stock chart weekly analysis since my last technical gold analysis in early March



Looks like support is now becoming resistance. Lets see how the market shapes up.
Market club's monthly is still a buy:




Weekly is at sell since 88.

Looks like gold is starting is new bull. If it clears its previous highs of around $100 we will have a new target.

Gold technical analysis March 2009

Latest gold charts and movements are here:



Marketclub's weekly, monthly and quarterly signals still signal a buy. The Daily chart which had signalled a sell now moved to a buy territory.







According to Fibonacci retracement we are in the first retracement level. Will we cross it or go down? Elliott wave chartists say this is the wave B?

February 2009 financial links

Here are some cool links for February, more on the trading front since I wanted to follow the market closer. Everyone has their own theory regarding how low can the market go !
1. Carlfutia explains his daily trading lessons with his analysis theory based on George Lindsay.
2. Elliot wave and cyclic theory update in AllAllan's blog posts. The Cycles theory along with techsignal which is a specially designed software that performs scientific market prediction with spectral analysis, synthesis of cycle events, and more.
3. Miranda Professional Blogger's interview by HIB.
4. Michael Lomker trying to make his market speculations in his blog.
5. Dshort comparing bear S&Pmarkets quite nicely.
6. James B. Stewart's theory of buying when the market falls 10% and selling when it goes up 25%.

Dow to new levels !

Dow breaks to new prices , what's next ? Elliott wave theorists predicts move up to wave 4 which means a rally. Robert Prechter recommends covering shorts after more than a year. What does that mean? Stocks up for a run?

How low can the Dow go?

Short Gold technical analysis

We looked at the technical analysis of Gold in my last post. I was tempted to a short one today based on the latest happenings based on the ETF GLD

Recently GLD has been dropping and the close for yesterday seems to be a support for 20 day EMA and also one last high.
MACD indicators say we are in slighly overbought market.

Daily chart indicator using trade triangles gave a sell signal at $95. Weekly charts still have the green signal.


Personally I think 20 day EMA and 50 day EMA could be very short term support levels for some intermediate term fall.

Allan's recent Elliott wave blog posts have been saying we are in declining Gold.

What are your thoughts?

Quick fusion brunch food for the economy

After posting about January effects and gold analysis I wanted to change the subject from the sour economy to something tastier. Here I suggest a simple brunch recipe which gives one energy to sustain and blog in this economy :).
Its called the Avocado fusion sandwich.

Ingredients:
1. 2 slices of multigrain or wheat bread or which ever is your favorite breads.
2. 1/2 Avocado ripened.
3. 1 teaspoon Salt
4. Pepper as per taste
5. Few Baby Spinach leaves
6. 4-5 slices of cut Cucumber
7. 2-3 slices of cut Tomato
8. Indian style dry peanut chutney 2-3 tea spoons

How to make it:
1. Mix the avocado, salt and pepper into a paste and apply to one side of the bread.
2. Top it off with peanut chutney, cucumber and tomato.
3. Spread the spinach leaves on the top.
4. Cover it off with the other slice of bread.

Cur into a triangle to make it look good ! Done.

Where is gold headed ?

I have been doing some research on technical analysis over the past few months - using technical indicators and marketclub triangles to figure out directions of some common names.

With the decline in stock markets , Gold has become a safe haven for investors and has recently sparked a rally. I usually track value of gold using the ETF GLD.

Marketclub's weekly trade triangles are pointing to an uptrend with both the weekly and daily triangles being green. Here is a weekly chart of GLD.

Let us use the common technical analysis signals using stockcharts.com's interactive signals

The trend line in solid blue indicates strong uptrend however the MACD and ROC signals indicate almost oversold signals.
The stock chart is above the indicator for 20 and 50 day EMA. For a horizon of a month or so the stock looks to be in uptrend with dips.

For a longer horizon the charts below seem to suggest that GLD is well above its 200 day EMA and also broken a key downturn trend.

Do you think Gold is overbought?

Disclaimer: I am currently long GLD. The above indicators are the authors view of the trend from various sources and investments should be based on risk and self assessment.

2009 January effect - did we see one?

In my last post at the beginning of January titled 2009 January effect we said that many investors believe that January is the month of high returns , particularly for the small caps.
Well, lets check it out:

The NASDAQ ETF QQQQQ moved from 29.46 to 29.06 closed basically flat throughout the month.
I was looking for something to track the small cap market and quick google searches yielded Vanguard Strategic Small-Cap Equity Fund (VSTCX). Dec 31st prices closed at 12.15 and at Jan 31st the fund was at 10.87 down slightly less than 10%.

The S&P 500 went from 902 to 825 down almost 10%.

Essentially looks like all the markets were down in Jan. Is that because we had a stellar December? Did people not have money to reinvest in January?

Looks like investors, still unsure about the economy stopped from putting long orders in January. Lets hope the future months will see a rebound into the positive territory.

Links and new sites for January 2009

Looking back at January I would like to share some links that I gathered over in January 2009.

1. The Dividend Machine introduced by HappinessIsBetter. HappinessisBetter gives details on the interview with William Spectrino and how one could use stock dividends to achieve financial independence.

2. Interested in free technical analysis of stocks ? Ino.com owns Marketclub.com which gives free technical analysis on a stock with ratings. Sample Forex training video link provided in my previous blog entry .

3. The Wild Investor introduced me to Stocktwits where community members share stock ideas real time.

4. Tickerville. Anyone interested to knowing about technical analysis of the current market and where its headed. Tickerville gives round up of important drivers of the market every couple of days.

5. Interested in learning about Elliot waves and how its useful predicting the markets Allan gives a good insight into technical analysis and his stock picks.

6. Steve features in MyWifeQuitHerJob.com. His blog was recently featured in TV. Check this link.

7. Informed trades gives a daily roundup of technical analysis of markets along with currency trading.

8. Interested in buying stock Warren Buffet style. Mark gives his view of the market and stockpics at Buylikebuffet.com.

9. My Money Blog continues to recommend few money saving tips and some credit card offers and links to cool coupons.

10. Interested in learning about other people's opinion on a particular stock? Check out WikInvest. You can read buy and sell recommendations on a particular stock here.

11. Want to have some free stock picking links? Gorilla Trades is offering free one week access to their site.


Please share more links with me and we can all share the links or follow me on Twitter.

Forex trading explained

If anyone is interested in Forex trading and wants to know how the following article from Marketclub.com explains how easy it could get.

The foreign exchange market is the biggest market in the world by far. It is traded all around the world, six days a week, twenty-four hours per day.

So today we're going to look at the Euro (EUR) against the US Dollar (USD). Here are some Market Club signals that were generated by their "Trade Triangle" technology.

This new 7-minute video explains some basics of using the trade triangle technology. It is available with no strings attached.

It is very important when you are trading in any market to be very, very, disciplined. You must also have a game plan and understand the rules of the game. If you get into forex trading just on a whim, you're going to be burned... that's almost a definite. If you approach the forex markets with respect and a game plan, you can do extraordinarily well.

The triangles have worked very well lately with the markets.

2008 invesment post-mortem and tips from investment gurus

Writing up some lessons learned in the brutal 2008 investment year. The DOW lost more than 30%, the NASDAQ and S&P also in the similar or more extreme ranges.
Like most of the crowd my investments performed no much better. What are the lessons learnt and some tips from investing experts which I could have applied for my 2008 investments.
1. Buy and hold might not work all the time. I mean it can if your investment horizon is beyond the bear market zone.
2. Book your losses and help your 2008 tax returns. Once can claim up to $3000 in one tax year provided the same or similar investment is not bought within 30 days. This is the wash sale rule. A strategy suggested by a blogger and the comments there in suggest to sell the fund/stock and then buy back after 30 days . Caveat is one might lose potential gain within the 30 days lost. Other choice is to buy another investment in next 30 days.
3. Investor Business Daily(IBD) suggested cutting losses greater than 8%. Lesson learned: An 8% loss takes 10% gain to make it even. This strategy would have saved me a lot in 2008.
4. Invest in certain cyclical companies - eg. Walmart during downturn. Keep a small goal for return and book profits and cut losses. I do not hold Walmart at this time.
5. Being long in bear markets is risky. If shares are bought then buy and hold will not be a good strategy.
6. Even if I would have followed the 200 day EMA then the long term entry or exit points would have established.
7. Look out for strong sectors and stocks within these sectors (Cramer & IBD).
8. "The stock market is always looking 6-12 months down the link. Present losses are already taken into account". I partially agree with this. The market direction is set this way but day to day dips could be caused due to real time news.
9. Investor Business Daily states never average down. I am not sure if I completely agree with this. Average down with a single company stock could be bad but with a fund might not not so bad.
10. And finally do a post analysis of your buys and sells (IBD) and note them on the stock charts. As Cramer puts it put 1 hr per week per stock.


Can you share your 2008 investment thoughts?