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This Market Shape Is More Telling Than a "Death Cross"

INDU chart

The major U.S. indices are still right about where they started the month, and the Dow Jones is showing a technical indicator called the "death cross."

A death cross gives an indication of some weakness in the average.

But the S&P 500 shows another indicator that is more telling...

How We'll Profit as Volatility Shakes Out the "Weak Money"

stock market volatility

After seven down days in a row, the markets roared back Monday and appeared to erase last week's sharp declines.

Now, Monday's action looked impressive by any measure... but the "green" chart I'm about to show you told me that we were looking at something other than the start of a sustainable rally.

And just as I thought, the markets headed lower again yesterday.

I'm not worried, though - and you shouldn't be either. Volatility like we're seeing now means we're looking at much bigger potential gains...

From Complexity to Chaos, From a Trickle to a Flood


As a volatility trader, I loved seeing stocks drop 2% last week after having risen 3%. But as a credit trader and student of market behavior, I know all too well that this type of volatility is a forecast of stormy seas ahead.

Markets were disturbed last week by more evidence that the economy is weak, in spite of the fact that a steady stream of lousy economic news this year has done little to prevent stocks from reaching new highs.

With first quarter GDP increasingly likely to come in at well below 1% - a number that certainly can't be blamed on the weather alone - investors are now starting to sweat. Here's what they'll do next...

This Is a Clear Path to Profits (Even in Volatile Markets)

It was quickly becoming OPEC's worst nightmare: By the mid-1980s, oil prices had begun to collapse.

What's more, renegade cartel members were selling more oil than their monthly quotas allowed, which merely made a bad situation even worse.

Ordinarily, that was a point when the Saudis usually would step in and cut their own exports.

But by then, the pricing situation had become untenable. Instead, the Saudis embarked on a bold new strategy.

First, they opened up their own spigots and flooded the market with crude. This taught those recalcitrant OPEC members a big lesson about lost revenues.

Second, they also introduced a "netback" pricing strategy that proved to be far more important - both for them and today's energy investors.

This new strategy considered the entire pricing sequence, using refinery margins (the difference in cost between processing and prices on the wholesale level) as a measure of prices upstream and downstream.

Now, 28 years later, the same netback strategy has made a comeback that has handed us a clear path to profits - even during periods of high volatility.

Here's how this strategy works... Full Story

Dow Hits Record High – What Does That Say About the U.S. Economy?

Equity market cheerleaders got very excited about the Dow Jones Industrial Average hitting a new record high yesterday (Tuesday).

The Dow closed at 14,253.77, topping its previous record close of 14,164.53 on Oct. 9, 2007.

While it is nice to see a sign that equities are improving following the devastating shock of the financial crisis of 2008, today's Dow Jones Industrial Average is not the same index as it was in 2007.

In fact, if we look back at when the Dow Jones Industrial Average last exceeded 14,000, we'll see that the Dow seems to have less of a connection now to what is really happening in the economy than it did in 2007.

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As Volatility Hits New Lows, It Could Be Time to Sell

Since January 1st, the average daily price volatility of stocks has fallen more than 60%. It's the biggest straight-line drop in 82 years.
A lot of investors are rejoicing. After all, stocks have risen an average of 17% a year when volatility is this low, Bloomberg reports.

[rwc_chart_single name="VIX"]

There is, however, a dark side. Periods of abnormally low volatility are a warning bell. Namely, they tend to precede powerful reversals that can wipe out investors, as was the case in 2000 and early 2008, and at other key turning points in the past 100 years.
So today let's talk about what low volatility means for you - both in terms of upside and how to protect yourself in a downslide.
If nothing else, <a href=""you've got to see this chart...