How to Avoid Big Losses & Execute Winning Trades Blindfolded

I know this headline just sounds too good to be true, and nobody could blame
you if you stopped reading right here. Consider this, though: A penny saved is a
penny earned might be a cliché, but its accurate. If your stock portfolio is
down by $1,000, you have to earn an extra $1,000 to bring your net worth back to
even. So a penny saved really is a penny earned. Now ask yourself, How much
money did I lose since the May highs or the beginning of the year? To make up
for the loss, youll have to work extra hours. But what if you didnt lose any
money? You would have preserved your purchasing power and be able to buy at
lower prices (if you so chose). In other words, knowing when to sell a position
is equally if not more important than knowing when to buy. Buying low and
selling high (or the opposite if you are shorting the market) require serious
insight about the market. Here is one simple strategy that protects your profits
and helps you identify winning trades without having a clue of what the market
whether Dow Jones, S&P, Nasdaq or Russell 2000 is going to do next. Below you
will find some actual trade recommendations. The number in front of the trade
recommendation corresponds with the number in the chart. Red numbers were sell
signals, green numbers were buy signals. Blind as a Bat But on Target Bats have
poor vision, but they always find their target simply because they work
effectively with what theyve got. Nobody has stock market radar vision, so we
too have to work with what weve got. We need to identify an edge and exploit it.
Every person may have a different edge. My edge is knowing the S&Ps hot buttons
levels that tend to force the S&P to change trends or confirm a trend (the red
and yellow lines drawn in the chart show some hot buttons). Imagine a car
driving on a long road with a few traffic lights. If the car is going to stop,
accelerate or make a U-turn anywhere on the road, it most likely will be at a
traffic light. If the S&P is going to reverse, it likely will be at
support/resistance. I spend much of my work hours identifying support/resistance
levels. Trend lines, Fibonacci, pivots, sentiment, prior highs/lows, etc., are
important tools to identify such hot buttons. The Big One Like a home builder
that starts out with the foundation and the frame, I start out by building a
rough, big picture outline. The chart below explains why a major market top was
expected. The ideal target range for this top was 1,369 to 1,382. This
resistance cluster was made up of Fibonacci resistances and the upper trend line
of a multi-decade bearish M top formation. 1) (See chart for corresponding
number) on May 1, I confirmed that a move to 1,369 would be close enough to
consider the right side of the giant M-pattern as completed. The very next day,
the S&P spiked briefly to 1,370.58 before reversing. The Roller Coaster The May
2 high was followed by a three-month roller coaster finished off by a meltdown.
There was a temporary bottom at S&P 1,258 on June 16. 2) On June 15: The 200-day
SMA at 1,257 is sandwiched between the 1,255 Fibonacci projection level dating
back to 2002 and last weeks at 1,259. Last Wednesdays low was at 1,261.9. If
this low is not enough, there is a strong cluster of support at 1,259 to 1,245.
A drop into the 1,259-to-1,245 range would prompt us to close out short
positions and leg into long positions. The Curveball 3) Unfortunately, no
strategy is perfect. On July 4, I suggested to short the S&P at 1,340 with a
stop-loss at 1,348. On July 6, I added, If the S&P does spike above and falls
back below 1,347 we will re-enter the short trade. If the S&P stays above 1,347
well watch and wait for a day or so and may go long. However, if the S&P moves
higher the VIX will be around 15. Owning stocks with the VIX that low is a risky
proposition. In a not-so-unusual effort to clear out stop-losses, the S&P closed
above 1,348 for one day before reversing. In seesaw situations like that,
investors need to be flexible and sometimes close and re-enter positions. 4) I
took one more stab at going long at S&P 1,300 and got stopped out at 1,330. To
emphasize, all long positions were closed at 1,330 on July 27. From there on,
the stock market went down hill. 5) I had already forewarned that due to the
potential debt-related down side, aggressive investors may go short if the S&P
drops below 1,325. Forget Your Personal Preference Even if your personal outlook
differs from technicals, its best to stick with technicals. I learned this when
I wrote on July 27, For some reason I still cant get myself to abandon the
prospect of higher prices. Nevertheless, support was broken and the S&P saw a
failed daily percentR low-risk entry today, so well go with the (bearish) flow.
6) Just a day later, the possibility of panic selling became real. A July 28
update: A break below the 200-day SMA and the trend line may trigger panic
selling. One way to avoid missing out on a potentially big opportunity is to use
the 200-day SMA at 1,284 as delineation between bullish and bearish bets buy as
long as the 200-day SMA serves as support, sell if it becomes resistance. If the
S&P seesaws, repeat the process. New Lows or Not The big question is whether the
decline is over and done with or if there will be new lows. Based on various
patterns, such as the 2007 market top mirror-image, VIX topping pattern, market
bottom patterns and sentiment, the low doesnt seem to be in yet. But I trust
technicals more than my personal bias. 1,173 was major support. Tuesdays update
recommended to go short when the S&P violates 1,173. As long as the S&P stays
below, we will be looking for lower prices. Worst-case scenario, were proven
wrong and have to close out the positions without net gain at 1,173. Ideally,
well get to close out short positions once the S&P reaches our downside target.
This approach to investing isnt foolproof. But allowing the market to establish
support resistance levels along with incremental trading ranges makes it
possible to maximize the gains and minimize any losses. This article is brought
to you by ETFguide.com. ETFguide is the information leader on exchange-traded
funds because of its vendor-neutral approach and its progressive reporting
style. Unique features include an ETF bookstore, a monthly e-mail newsletter,
and subscription based ETF portfolios.

Want to Trade Gold? Let Us Count the Ways

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tdp2664 InvestorPlace I am not a gold bug — I make fun of people who fear inflation, I make fun of people who think even European governments will let their banks fail, I make fun if people who have gold coins in case the apocalypse comes up on us. Sorry if I offended you, but take heart — I have been recommending buying gold and its cousins for a long time and am still doing so. Why? First, the fearful are buying and driving up prices, and they will continue to do so as long as there is political uncertainty — and that means several years. Second, central banks, especially in emerging nations including India and China, are buying gold. Third, institutional money managers are boosting portfolio allocations to gold from the typical 2%-5% to as high as 15%. And last, as they should be, are the traders. However, they get the headlines, and that is why the chart readers – remember that people who predict fortunes and read palms read charts as well – say we are in a bubble. Nope, we are not. And here is how to trade gold. Investing Approach – Buy the SPDR Gold Shares (NYSE: GLD ) exchange-traded fund. the ETF for gold.

Six Dividend Stocks Increasing Distributions Last Week

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tdp2664 InvestorPlace Several companies raised distributions over the past week. The companies which I highlighted in this article have each raised dividends for at least five years in a row. These companies also announced dividend increases over the past week. I typically utilize this list to find hidden dividend gems . One hidden dividend gem uncovered was Hingham Institution for Savings ( NASDAQ : HIFS ), which has delivered a 61.6% total return since I analyzed the stock in April 2010 . The companies include: Cincinnati Financial Corp. ( NASDAQ : CINF ) engages in the property casualty insurance business in the United States. The company raised its quarterly dividend by 0.63% to 40.25 cents per share. Cincinnati Financial Corporation is one of 11 companies in the world that have managed to consistently raise dividends for over half a century. Yield: 6.1% ( analysis ) MGE Energy ( NASDAQ : MGEE ), through its subsidiaries, operates as a public utility holding company. It engages in generating, purchasing, transmitting and distributing electricity. The company raised its quarterly dividend by 2% to 38.26 cents per share. MGE Energy, Inc. is a dividend champion which has raised dividends for 35 years in a row. Yield: 3.8% Delta Natural Gas (NASDAQ: DGAS ) distributes or transports natural gas in central and southeastern Kentucky. The company raised its quarterly dividend by 2.90% to 35 cents per share. Delta Natural Gas Company, Inc. has consistently raised distributions for seven years in row. Yield: 4.5% ITC Holdings (NYSE: ITC ), through its subsidiaries, engages in the transmission of electricity in the United States. The company raised its quarterly dividend by 5.2% to 35.25 cents per share. ITC Holdings Corp. has raised distributions for seven consecutive years. Yield: 2% Maxim Integrated Products (NASDAQ: MXIM ) designs, develops, manufactures and markets a range of linear and mixed-signal integrated circuits worldwide. The company raised its quarterly dividend by 4.8% to 22 cents per share. Maxim Integrated Products, Inc. is a dividend achiever which has consistently raised dividends for 11 years. Yield: 4.1% Nordson Corp. (NASDAQ: NDSN ) manufactures equipment used for precision dispensing, testing and inspection, and surface preparation and curing. The company raised its quarterly dividend by 19% to 12.5 cents per share. Nordson is a dividend champion that has regularly raised dividends for 48 years in a row. Yield: 1.1% Full Disclosure: Long CINF and HIFS. For more information, visit DividendGrowthInvestor.com .

Daily News and Research on Chinese Stocks (Aug 22, 2011)

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tdp2664 China Analyst Below is today's Daily News and Research on U.S.-Listed Chinese Stocks : ACH : Alcoa Upgraded on Stronger Pricing, Higher Margins – at Forbes (Mon 1:00PM EDT) ACH : Bet on Aluminum: Davenport Upgrades Alcoa – at Barrons.com (Mon 11:26AM EDT) ADY : NYSE stocks posting largest percentage decreases – AP (Mon 1:20PM EDT) BIDU NTES SINA SNDA SOHU YOKU : What's on SINA's Tudou List? – at Motley Fool (Mon 12:13PM EDT) BIDU RENN YOKU : Groupon Isn't Moving to Wrigley Building – at The Wall Street Journal (Mon 11:27AM EDT) CEA : Is Ryanair Holdings Slowing Down? – at Motley Fool (Mon 11:26AM EDT) CSUN JASO JKS LDK STP TSL YGE : Investing in Solar: Suntech Power Boosts Solar Stocks – Wall St. Cheat Sheet (Mon 1:37PM EDT) CTE : Boeing, Delta Air, HollyFrontier, Marathon, Travelzoo: U.S. Equity Movers – at Bloomberg (Mon 11:28AM EDT) CTRP : 9 Consumer Cyclical Stocks With Impressive Top Line Growth And Liquidity – at Seeking Alpha (Mon 11:48AM EDT) GA : 5 Profitable, Mid-Cap Stocks Rallying Against The Market While Retracing From Their Highs – at Seeking Alpha (Mon 1:32PM EDT) HOLI : Nasdaq stocks posting largest percentage increases – AP (Mon 1:20PM EDT) JASO JKS LDK TSL YGE : YGE: Three Upgrades On Q2 Beat; Piper Cheers Diversification – at Barrons.com (Mon 12:32PM EDT) JASO JKS SOL STP YGE : UPDATE 4-Suntech sees bright spots, despite wider Q2 loss – at Reuters (Mon 11:25AM EDT) JASO LDK SOL TSL YGE : Sunpower: Auriga Ups To Buy, But Costs Still An Issue – at Barrons.com (Mon 12:20PM EDT) JST : Nasdaq stocks posting largest percentage decreases – AP (Mon 1:20PM EDT) MPEL : Should You Buy and Hold Melco Crown Entertainment? – at Motley Fool (Mon 11:39AM EDT) NPD PWRD : 7 Reasons Not to Worry This Week – at Motley Fool (Mon 12:39PM EDT) PTR : Angola, Ghana, And Mozambique Offshore Oil Fields Offer Additional Upside For Major Oil Companies: An Interview With Philip Weiss – Wall Street Transcript (Mon 1:11PM EDT) SHP : On The Fly: Mid-Day Wrap – theflyonthewall.com (Mon 12:16PM EDT) SHP : On The Fly: Mid-Day Wrap – at theflyonthewall.com (Mon 12:16PM EDT) SINA : Investing in Tech: Final Bids for Hulu Due Wednesday, H-P and Skype Still Kicking – Wall St. Cheat Sheet (Mon 12:46PM EDT) SOL : ReneSola adopts poison pill, plans share buybacks – AP (Mon 11:46AM EDT) STP : Suntech Power Earnings Preview: Focus On Cost Reduction – at Seeking Alpha (Mon 11:44AM EDT) STP YGE : Yingli Green Energy Shares Rally On Trio Of Upgrades – at Forbes (Mon 11:01AM EDT) WX : Can Chinese Biotech Appropriately Diversify Your Portfolio? – at Minyanville (Mon 1:15PM EDT)

Bullish Call Spread Trade on AAPL

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tdp2664 InvestorPlace Like the rest of the equities market, shares of Apple Inc. ( NASDAQ : AAPL ) were swimming in red ink last week. Nevertheless, looking at the action in the options pits, it appears one spread strategist — like most of Wall Street — was maintaining an optimistic outlook on the tech behemoth. Specifically, in Friday's session, symmetrical blocks of calls traded at the January 2012 380 and 400 strikes. Implied volatility (IV) on the 380-strike call was last seen 2.8 percentage points higher, while IV on the deeper-out-of-the-money call was up 2.5 percentage points at last check, pointing to the initiation of new positions at the strikes. However, while the 380-strike calls traded at the ask price of $29.37, implying they were likely bought, the 400-strike calls crossed at the bid price of $20.77, hinting at sell-to-open activity. Simply put, it appears the speculator constructed a long-term bull call spread on AAPL for a net debit of $8.60 per pair of calls ($29.37-$20.77). By doing so, the investor is betting on shares of AAPL to power north of the $388.60 level (bought call strike plus net debit) within the calls' relatively lengthy lifetime. However, no matter how far the security should climb beyond the $400 level before options expiration, the most the trader can make is capped at $11.40 per pair of calls (difference between strikes minus net debit) thanks to the sold 400-strike calls. On the flip side, even if AAPL extends last Friday's retreat, the most the investor stands to lose is limited to the $8.60 paid to establish the spread. But if the strategist has bullish expectations for AAPL, why not just buy the 380-strike calls? After all, had the trader simply purchased the 380-strike calls, their profit potential would be theoretically unlimited, as there's no limit to how high a stock can rally. In the simplest terms, while a long call can offer an appealing profit potential, the “vanilla” call buyer would've needed AAPL to muscle atop the $409.37 level (strike plus premium paid) just to break even. Plus, they would've been out the entire $29.37 paid for the call had the stock failed to live up to the lofty expectations. By simultaneously selling the higher-strike call, the strategist not only slashed their breakeven rail, but also reduced the maximum risk (and initial cost) by nearly 71%. At last check, shares of AAPL have surrendered more than 4% to linger in the $356 vicinity. In order to rebound and extend its quest for record highs — as per the strategist's expectations — the stock will have to power atop both its ten- and 20-day moving averages, which haven't been toppled since August 1. As alluded to earlier, though, the options bull isn't the only member of AAPL's fan club. According to Zacks, the security has earned 37 “strong buys” and four “buy” ratings from analysts, compared to three lukewarm “holds” and not a single “sell” suggestion. Plus, only about 1.3% of the stock's float is dedicated to short interest, and it would take less than a day to buy back at AAPL's average pace of trading. This article originally appeared on MoneyShow.com .

Kapitall Strategies: Top 10 Rallying Stocks For Your Watch List

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gol2664 Negocioenlinea Kapitall Strategies: Top 10 Rallying Stocks For Your Watch List NASDAQ – 1 hour ago Strategy: If a stock gains more than 3% since the previous close, buy it, and sell it on the close 10 trading sessions later. But which of today's big winners might be good candidates for this …

Six Dividend Stocks Increasing Distributions Last Week

Several companies raised distributions over the past week. The companies which
I highlighted in this article have each raised dividends for at least five years
in a row. These companies also announced dividend increases over the past week.
I typically utilize this list to find hidden dividend gems . One hidden dividend
gem uncovered was Hingham Institution for Savings (NASDAQ: HIFS ), which has
delivered a 61.6% total return since I analyzed the stock in April 2010 . The
companies include: Cincinnati Financial Corp. (NASDAQ: CINF ) engages in the
property casualty insurance business in the United States. The company raised
its quarterly dividend by 0.63% to 40.25 cents per share. Cincinnati Financial
Corporation is one of 11 companies in the world that have managed to
consistently raise dividends for over half a century. Yield: 6.1% ( analysis )
MGE Energy (NASDAQ: MGEE ), through its subsidiaries, operates as a public
utility holding company. It engages in generating, purchasing, transmitting and
distributing electricity. The company raised its quarterly dividend by 2% to
38.26 cents per share. MGE Energy, Inc. is a dividend champion which has raised
dividends for 35 years in a row. Yield: 3.8% Delta Natural Gas (NASDAQ: DGAS )
distributes or transports natural gas in central and southeastern Kentucky. The
company raised its quarterly dividend by 2.90% to 35 cents per share. Delta
Natural Gas Company, Inc. has consistently raised distributions for seven years
in row. Yield: 4.5% ITC Holdings (NYSE: ITC ), through its subsidiaries, engages
in the transmission of electricity in the United States. The company raised its
quarterly dividend by 5.2% to 35.25 cents per share. ITC Holdings Corp. has
raised distributions for seven consecutive years. Yield: 2% Maxim Integrated
Products (NASDAQ: MXIM ) designs, develops, manufactures and markets a range of
linear and mixed-signal integrated circuits worldwide. The company raised its
quarterly dividend by 4.8% to 22 cents per share. Maxim Integrated Products,
Inc. is a dividend achiever which has consistently raised dividends for 11
years. Yield: 4.1% Nordson Corp. (NASDAQ: NDSN ) manufactures equipment used for
precision dispensing, testing and inspection, and surface preparation and
curing. The company raised its quarterly dividend by 19% to 12.5 cents per
share. Nordson is a dividend champion that has regularly raised dividends for 48
years in a row. Yield: 1.1% Full Disclosure: Long CINF and HIFS. For more
information, visit DividendGrowthInvestor.com .