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Financial Articles

The Irony of Risk in the Markets - Right now in the markets, there are essentially 2 trades: risk-taking and risk-averting. The risk-taking trade can be summarized as US dollar and Japanese yen down, bonds down, everything else up. Risk-averting is just the opposite.

Options Trading - Option Trading allows you to profit form every possible move in underlying asset. It is not only leverage but also provide you protection when a stock moves against you. This article describes the meaning and basics concepts of Options Trading.

An Insight on the Growing Trend of CFD Trading - CFDs trading are one of the most popular financial components for a successful trader. The article describes about the growing popularity of CFD Trading in the present financial scenario.

Waiting for a Pullback! - The past week in gold, silver, oil, natural gas and the broad market wasn't anything to write home about. We are seeing controlled profit taking which is making the market choppy. Many traders are getting very bearish on the market which is a good thing in my opinion. According to my market internals, sentiment and volume analysis we should get a shake out (sharp dip) which would make traders exit their positions before the market continues higher.

Stock Cycles Peaking! - So far, in 2009, the stock indexes have seen two firm corrections. The first was a 29% drop (basis SPX CASH) from the 01/06/09 high to the 03/06/09 bottom - with the second being the 9% decline from the 6/11/09 high to the 07/08/09 low.

Cautious Optimism! - The market is starting to look and feel top heavy with many indicators and price action patterns giving cross signals. We must be cautious by tightening our stops and take some profits off the table.

Currency Markets, Vegas-Style! - Let's face it; the currency market is akin to the ultimate final table in the World Series of Poker. At that table, you have eight people sitting around, all trying to bluff one another.

Global Game of Chicken? - As we know that the United States has a massive deficit and China has a massive surplus (mostly held in US dollar). As US dollar continues to declines, China experience the lost. What needs to happen to get us off this global collision course?

Canadian Income Stocks! - The 2008 financial crisis uncannily echoes what happened in Japan more than a decade ago. In the 1990s, the Japanese banking systems had become overloaded with bad loans after a property bubble collapse, according to Gillian Tett, author of Fool's Gold. The investor psychology seemed dangerously similar too. If this is the case, investors who buy high yield stocks now could collect big dividends while the economy fights to get back on its feet.

Mid-Week Commodity ETF Update! - Commodities and stocks have been on fire the past two weeks and I think it just may be time for things to take a breather. Profit taking could happen anytime from now.

Stop-Loss Trading Strategy - Developing of a stop-loss trading strategy is one of the most important question in the trading life of every active trader. A correctly developed trading strategy helps to protect earned profit and to avoid dramatic losses that could wipe out all investments. There are several factors that define the main rules by which a stop-loss trading strategy is developed.

Investment Strategy For A 401K - If you have a 401k plan from your job then you must wonder what is it and how does it work? In your retirement account you will notice a lot of names which are called mutual funds.

Sound As A Pound....For Now! - Yesterday, the Bank of England vote unanimously to leave the size of its asset purchase plan unchanged at 175 billion pounds and voted to leave interest rates unchanged at 0.5%. This is seemingly good news for the Pound in the near-term, as the currency markets are reflecting this morning with the British pound up vs. other currencies. But what is the outlook for GBP going forward?

China is No Longer an Emerging Economy! - As I woke Monday morning I saw that the Asian markets, particularly the Shanghai Composite, were selling off sharply. And I thought to myself, "oh no, here we go". My general feeling is that the US equity market is overbought as the valuations haven't quite caught up to price. Yet the US equity markets finished the day positive. What gives?

Where's the Bottom? - Economies move through a series of expansions and contractions known as the business cycle. This should not be news to anyone with even a modicum of financial acumen, yet it amazes me that those who are tasked with understanding this basic concept get it so wrong time after time.

Equity Markets are a Farce! - What drives an investor to buy a stock? Is it the fundamentals? The technicals? A combination of the two? Well I'm not quite certain anymore. You can basically throw all of the textbook answers out the window when it comes to today's equity markets. Why do I say that? Because I believe that the only thing that is driving this market is the notion that the government is going to bail out everyone and their brother.

Deflation and the Dollar, Round 2? - The oil inventory numbers came out yesterday and there was an increase of roughly 5 million barrels, 1 million more than the American Petroleum Institute's (API) estimates. Consequently, the price plunged nearly 6% in its largest drop in nearly 3 months. But is this the whole story?

Betting on Obama Healthcare - As the health care debate continues to its next phase, the far left decides as to whether or not President Obama is still their champion. Stocks like Aetna (AET) and United Health (UNH) have reacted. When Secretary Sebelius commented on Sunday that the public option in the health care reform bill was not an absolute must, traders interpreted this as it was dead. They are probably right!

Employment (NFP) Report and the Effect on Markets - I have to admit last week, I was little skeptical about this stock market. I was thinking that when the un-employment numbers came out (next week) tomorrow we could see a big sell off in stocks. The stock market has been off the charts lately, and everyone is trying to figure out whether or not they are under invested in it.

Warren Buffett and his Effect on the Stock Market! Part 2 - Buffet is indeed one of the greatest investors to ever walk the face of the earth, and his strategies and ideas carry tremendous weight. He influences the influencers and very often his beliefs are taken out of context and therefore misunderstood and lead to stock bubbles.

Warren Buffett and his Effect on the Stock Market! - When Warren Buffett speaks, people listen. However, when he is misinterpreted or taken out of context his words carry so much weight that they can have a large negative effect.

The Dangerous Iron Condor - Placing iron condor spreads on the broad market indexes is a relatively conservative, non-directional trading strategy that may be used for consistent income generation. This strategy profits as long as the index trades within the channel formed by the two spread positions. It is best used during sideways or slowly trending markets.

Option Expiration and Exercise - Examples of common errors include being surprised that one is unable to close an index option position on the Friday before expiration, or being surprised by an unhedged option exercise during expiration.

Put Time On Your Side - Many conservative income generation trading strategies depend on the time decay inherent in options pricing. When I establish an iron condor well OTM (out of the money), I am selling option spreads and expecting those spreads to slowly lose value as the underlying stock or index trades within a channel.

Vertical Spreads and Implied Volatility - It is commonly taught that one should establish a credit spread when placing a trade with high implied volatility (IV) options and a debit spread with low IV options. But the previous example illustrated identical returns for the credit and debit spreads.

Facts and Fallacies About Risk/Reward Ratios - When someone tells you an investment will return 300%, but doesn't tell you the probability of success, you are missing critical information necessary to make a decision about that investment.

Earnings and Unemployment - In the midst of earnings season, the market is responding in typical fashion. In one of my previous articles from earlier this month, I talked about some of the things the market needed to see from earnings season in order to stabilize and move higher. Well, we're seeing them. Now what?

Mutual Funds Controlled by Stock Market Cycles - Retirement accounts are still down 40% from their 2007 peak. Consultant Lee Smith is providing the free mutual fund service that reduces losses during stock market collapses. This service is a defensive strategy that is known to high-net-worth clients.

Why you have to love Tech Stocks! - As someone who spent a lot of time as a Financial Planner after the Tech Bubble in the late 90's, it is not easy to say you have to love Tech stocks. Why? Because, the Tech market of the late 90's became the poster child of what not to do when investing. It became a cliché for anyone who taught people how to diversify and be a balanced investor.

THE Housing Solution - Well the numbers are in and it looks like home foreclosures are up a whopping 15% in the first half of 2009, affecting more than 1.5 million households. This problem does not appear to be getting any better as unemployment is nearing 10% and could go even higher, if you believe like me that government forecasts are about as accurate as throwing darts in the dark.

Black Gold. Worth More than Real Gold? - Let's face it: gold is very pretty. It makes for great eye-candy when dangling from some starlet's neck, usually holding some other equally beautiful gem or precious stone. But what's it really worth?

Is California's Economic Woes a Glimpse of the Future? - The State of California's economic problems continue to mount as Fitch downgraded their rating on their bonds earlier this week, and one can't help but to think is this the fate of the US on a national level?

Easy-to-Follow, High Probability Forex Strategy - Have you ever found yourself on the "wrong side of the trade"? Many traders do. Here is a a strategy that involves using a 50 period Simple Moving Average and Slow Stochastics in order to help you get "out of the gate" and running.

Markets are Hyper-sensitive to Political Rhetoric - Some things never cease to amaze me. Just when you thought we were about to settle in to a lazy summer of sideways markets, some fools just can't help themselves to be quiet. I am talking about politicians. And government officials. When are they going to learn that the markets are hyper-sensitive to not only what they do, but what they SAY?

All About Earnings - In order to see if this market has legs and can continue, we must first take look at what has been causing it to rise in the first place. Quite frankly, the only things causing this market to move up are the hope and prayer that second quarter earnings aren't going to be absolutely atrocious!

Stock Market Outlook: Holding pattern until the Fall! - This stock market has really been historical over the last 12 months. 2009 in and of itself has been quite a ride, but where does this leave us? The market has been stabilizing and trading in a range for two months. There may be a big move to the upside this Fall out in front of the heavy inflation to follow.

Market tells Bernanke: Take a Hike! - Much has been made of the inflation vs. deflation debate as of late, but at the end of the day neither will be seem important if investors have no confidence in our economy. If you want the markets to be stronger, then you have to project strength and not weakness.

Fed Decision: Deflation vs. Inflation - With the Fed in meetings the next two days, and fears of heavier inflation much greater than ever before, Bernanke and company find themselves in a very difficult spot and will have to tip toe around inflation fears and focus on their bigger fears of deflation.

BRIC Countries: Unified in their Hatred of the Dollar - The BRIC ETF (EEB) and the US dollar have an inverse relationship; that is when the dollar is going down, the BRIC ETF is going up and vice versa. So it makes sense that some of the BRIC countries would like us to have a weak dollar. But yet we always hea r that China is concerned about our weak dollar? What gives? What do they want from the dollar?

Obama Health Care and Your Money! - The US dollar has been in a down trend for years because of our massive deficits and we are already spending money like a 20 year old with their first credit card. There really is no philosophical or ethical debate here. Socialized Health Care will lead to a national bankruptcy.

Everything You Need to Know About the $8000.00 Housing Credit! - The article discusses America's national debt issues, policy makers and politicians, and why a higher interest rate is necessary for Dollar strength and a recovery.

Interest Rates and Politics - The article discusses America's national debt issues, policy makers and politicians, and why a higher interest rate is necessary for Dollar strength and a recovery.

How China is helping the Aussie & Canadian dollars! - The article discusses China and its expanding economy's needs. It explains how China's growing demand for commodities will cause the Canadian Dollar and Australian Dollar to appreciate.

Why the Oil Roller Coaster is Over! - Oil in the global economy has become more of an indicator for the global economy's health, where in the past rising oil prices was a bad thing, because it beat up the best consumer in the world. (U.S.A.) The correlation is evolving in the global economy and both stocks and oil may continue to rise together.

Is "Big Ben" Bernanke popping the Government Bubble? - As economic leaders in the world, the only thing that we have taught the rest of the world is to over borrow and over spend! Our economic leaders need to get truly committed to a strong dollar policy.

Investing In A Weak Dollar - All the signs are here! The dollar is on its way to testing its old lows and the world of the weak dollar is here to stay for a while. This also means inflation and we are already starting to see this in oil and other commodities as they move higher.

A "Weak" Consumer With Confidence! - When the strong Consumer Confidence numbers came out today, it begged the question: Do we really want consumers too confident?

Auto Stocks In The New World - It was quite funny when Obama joked about how the magazine "Car and Driver" named him the "Auto Executive of the Year". Then Obama announced that the autos would need to meet stricter emissions standards. He won't be auto executive of the year anymore...

North Korea's Nuke & Missile Tests Shake up the Yen! - After testing a nuke and firing off 5 missiles over the past few days, North Korea now says that it has abandoned its truce that ended the Korean War back in 1953. So what does all of this mean for currencies?

Asset Allocations Insufficient In The New Economy - Last week I wrote about some stocks to keep your eye on in what is now becoming known as the "New Economy". Whether or not you agree with the direction and steps that the government is taking is immaterial at this point, what is of the utmost importance is that you position yourself and your portfolio correctly

How to Invest in the New Economy - We already know that Obama likes to moon-light as a stock market guru, but can we be sure that his policies and rhetoric will be good for private business? Well that all depends. Look no further than the proposed budget and the stimulus program. The devil is in the details, as they say.

Interest Rate Hike Shocker! - The article discusses the current economic condition and how it came to be. It outlines what steps need to be taken to right the wrongs of previous administrations and their policies, and it discusses how a higher interest rate would benefit the U.S. by bringing capital flows back toward the Dollar.

ETFs Signal Economy Bottom - The proliferation of ETFs has long been talked about and now there is basically an ETF for just about any investing situation you can think of. There is now a focus on ETFs that trade on non-US exchanges and in non-US dollars. And let's not forget the leveraged ETFs which are also looking to get in on the act. Could this rise in the number of ETFs that are shifting the focus away from the US actually be telling us that we are near a bottom in the economy?

ETFs Trading - Exchange traded funds have been designed to provide ability to the investors to have trading vehicle that would have the characteristics of the mutual funds, yet, would be tradable as stocks (trading during the open market hours, trading on margin and ability to open a short trade).

ETFs Advantages - You have to look on ETFs as mutual funds that could ne traded as stocks and to see the advantages of exchange traded funds one must to compare them to the mutual funds trading and then compare them to the stock trading. hel'''lo

Its Obama's Economy Now! - Well the first 100 days of the Obama Presidency have come and gone. Regardless of your political leanings you have to give the Obama administration some credit. We will avoid the next Great Depression!

Investing Trick of the Pros: As goes Oil, So goes the Euro! - Oil and the Euro Tend to treavel in the same direction (over time). This also helps to influence the UD$ downward. For these reasons, I'd say it's a higher probability if someone is a buyer of the Euro vs a seller of it.

The 8 Percentages You Should Live Your Life By - With the country being in debt to itself and foreign nations, and its people borrowing money like there is no tomorrow, it's hard to know how much is too much. Below I've outlined some "rules of thumb" that you should be living your life by

The Insider's Guide to Penny Stocks, Part 2! - Despite all of the warnings, the appetite for penny stocks is greater than ever. Investors routinely see triple digit gains and think that even if they can capture even a portion of those returns they are ahead of the game. Sadly this rarely happens, as they become victims of a "pump and dump" scam. Here's how it works.

The Insider`s Guide to Penny Stocks! - In my 15 years as a professional trader, I have had my fair share of "experiences" with penny stocks. I suppose that with the recent challenges we have been facing in the economy, folks are looking to do just about anything to make money and recoup losses. Here's what you need to know before you invest your hard-earned dollars in this nebulous market.

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