The Stock Market Is Now Officially Bullish!

Conference Notes:

1. Opening Discussion on Macro Money Management (Macro Position Sizing).
   1. MMM protects your family from a…

i. Family member who has too high a risk propensity.

ii. Family member who is too cautious.

1. 1. MMM allows you to calculate how fast it will take you to safely save enough to speculate in options, futures, or Forex. Forex is hot right now but people are not being given risk capital guidelines.

1. Discussion of Technical Analysis
   1. This month I want to talk about how useful the moving average cross over is. Convention has it according to market efficiency that, “the news makes the price.” But people who have watched the market for years have noticed that announcers 99% of the time give a story after a big move. So the justification behind technical analysis is that “the price makes the news.“
   2. No technical indicator is foolproof. The more complex people get with technical indicators, or the more precise they try to be, the less effective the technical analysis.

i. So keep it simple with 1, 2, or 3 technical indicators that look at different aspects of the market.

ii. Don’t forget the most powerful technical indicator of all…the major trend (seen on a weekly or monthly chart).

1. 1. It’s particularly useful to analyze the major trend of the general market. Lets look at the SPDR S&P 500 ETF (NYSE:SPY).

BTW: I made this analysis using FREE software at http://www.trackntrade.com/hf/stocks/

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i. Notice how a simple crossover between a fast and slow moving average identified the top and bottom of the market as per the S&P 500.

1. 1. But it’s also useful when looking for entry into stocks. Let’s look at Ford.

Notice how powerful the moving average cross-over is on a monthly chart when considered in light of the major trend!

1. Trade-Stops:

First Benefit: Your Stop Is Invisible to the Market!Second Benefit: It’s a Reminder to Tell You to Reavaluate The Position!Third Benefit: Alerts Don’t Expire…Can Be Indefinate!Fourth Benefit: Alerts Are Adjusted For Dividends!Fifth Benefit: Easy to Use!Sixth Benefit: Important To Remember That Investors Have A Risk Seeking Bias With Losses; Risk Averse to Gains… its as hard if not harder to stay in a winning trade; the big players make their money on just a few grand slams they can stay onboard thoughout the year!
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