Stock Market: My Secret Weapon in Predicting its Direction [stocksmarketarticles]

Stock Market: My Secret Weapon in Predicting its Direction [stocksmarketarticles]

Despite the gloom about India's economy, the country's stock market is up 12.5% this year making it the best performer among the BRIC nations. India's Sensex has also ... This week Indian markets were looking for a positive direction from the ... India's stock market rally may not last: Chart

www.forextradingseminar.com The signs have already formed that a major stock market crash possibly already started now in 2011 is very likely. Whenever a stock market crash occurs it is always perceived as a negative event. Recently in the May 2010 stock market crash it was reported that the entire crash was caused by human error when in fact the so called "crash" happened precisely on target at the top of a perfect Elliott Wave pattern when natural forces across financial markets were already poised for a sudden fall in price. Is it possible for any financial market to go straight up forever without corrections? According to the history of all markets that have been charted there has always been a pattern and cycle of trends followed by corrections on all time frames long and short. In Forex trading every movement in either direction of any currency pair is a profit opportunity and it makes no difference which direction the market is moving. However, in the stock market the emotional bias is always toward buying and when the price falls it is perceived as a tragedy rather than a part of natural cycles. Fortunately, when the stock market goes down the value of the US dollar tends to go up in inverse correlation. Right now there is a lot of evidence that the US dollar could strengthen against other currencies. And ironically some currency analysts are predicting another big drop for the Euro over the next year. Therefore the Euro vs. the dollar (EUR could produce an ...

stocksmarketarticles.blogspot.com Stock Market Crash 2011 Creates Massive Profit Opportunity in Forex Trading

Okay, it’s March of 2011 and I see stock advisors in general are getting very bullish on the stock market. I start to predict a decline for stock prices. I even make an audio/video presentation stating that I predict stocks will start to collapse on May 2, 2011.

From May 2 to June 15, 2011, the Dow Jones Industrial Average falls from 12,876 to 11,875â€"a drop of 1,000 pointsâ€"a mini crash. I’m sure plenty of short-sellers made plenty of money during this period.

But by June 15, the majority of stock advisors that were bullish on May 2 are now solidly bearish on stocks. My customer service people tell me our own subscribers are calling in panicking, not knowing what to do as stock prices fall.

In the middle of June, I start writing in Profit Confidential that stocks have become severely oversold and are due to bounce. Actually, exactly on June 15, 2011, the headline for my lead story in Profit Confidential was “Stock Market Bounce Imminent as Bullish Sentiment Collapses.”

From June 15 to today, the Dow Jones has a run up 726 points, or 6.1%.

I’m not patting myself on the back. Far from it! As soon as an analyst starts thinking he or she is really good, they get into trouble.

My point today is that watching the consensus, seeing what the great majority of stock advisors believe will happen, and then going against their view has served me very well over the past 25 years. It’s actually my secret weapon in predicting the direction of stock prices…bet against the herd and you’ll find you’ll usually win.

Michael’s Personal Notes:

The truth comes out…

I’m talking about the recently released data from the Fed that shows Goldman Sachs & Co. was indebted to the Fed by $ 34.5 billion on December 31, 2008.

The new data show the banks the Fed lent money to in 2008 under a lending program. Of the 19 banks that received loans, all of them paid the money back.

Goldman is the most profitable bank on Wall Street. At the time of the credit crisis, billions were made available to this bank at interest rates that were very low. This is the same bank that was later sued by the SEC for misleading investors about subprime mortgage products; a lawsuit that was settled for about $ 500 million.

Hence, one arm of the government lends Goldman money at very cheap interest rates, while another arm of the government sues Goldman for what I see as alleged mortgage-backed securities fraud. Meanwhile, Goldman made billions during the housing and mortgage boom years of 2003 to 2006.

Here’s my question: given the way Goldman operates (it rarely has a trade on which it does not make money) and how far its tentacles reach on Wall Street, in Washington and in the Fed, how can it not continuously make money?

Where the Market Stands; Where it’s Headed:

Stocks continued to climb the proverbial “wall of worry” yesterday. This morning, the Dow Jones Industrial Average sits a pretty 1,049 points higher than it started 2011â€"up nine percent so far for 2011.

As we entered 2011, I wrote that there was no doubt in my mind that 2011 would not be a repeat of the strong stock market performances of either 2009 or 2010. The bear market rally has entered its third year; it’s getting tired. But it has yet to finish its business…the business of luring investors back into stocks.

It was only early this year that retail investors really started getting back into stocks and equity funds. I have patience and I suggest you have the same patience, and we should not be premature in leaving the rally. The bear market rally that started in March of 2009 has more life left in it.

What He Said:

“If I had to pick one stock exchange that would rank as the best performer of 2007, it would be the TSX (Canada’s equivalent of the NYSE). Interest rates in Canadaremain very low and they are not expected to rise anytime soon. Americans looking to diversify their portfolios, both as a hedge against the U.S. dollar and a play on gold bullion’s price rise, should consider the TSX. Most brokers in the U.S.can buy stock on this exchange.” Michael Lombardi in PROFIT CONFIDENTIAL, February 8, 2007. The TSX was one of the top-performing stock markets in 2007, up just under 20% for the year.

Retire on This One Hot Stock!

This stock is up 232% since we first picked it. Our expert analysts say it will go up another 100% in the next 12 months! Our top 19 stock picks were up an average of 173.57% in 2010 (not a misprint). See where we are making money in 2011 and get our combined 100 years of investing experience working for you starting today.

Get your FREE report on our top stock pick immediately here.

http://www.profitconfidential.com/pcabs/

Suggest Stock Market: My Secret Weapon in Predicting its Direction Articles

Question by : Do you think the current rally in the stock market will continue? What are your thoughts on the direction the major indexes (Dow / NASDAQ / S&P) for the remainder of 2011? Best answer for Do you think the current rally in the stock market will continue?:

Answer by jeff410
No, I think its a bear market rally. Even if the Euro crisis is resolved the US economy still has a lot of problems with slow growth and high unemployment.

Answer by muncie birder
I sort of think it is a good time to take a few profits.

Answer by Ryan
their all below the 200 day sma on daily chart, so untill that breaks convincingly stay a bear.

Answer by zuma
Economic Indicators are trickling up. The "Doom and Gloom" crowd would quickly and happily remind you that nothings changed..And they're obviously no worst the wear.The other guys to blame. Then the "Doom and Gloom" crowd contagious to Greece,..Ignore the fact that Greece has been broke for a long time..But continue to hold our Investments Hostage...If Investors believe they're some how are infected/related,..this sham-wow still has legs....gullible suckers We need a Suckers Poll,..cause sentiment effects the market, and might even give them their self fulfilling prophecy,..of a Total Economic Collapse,..And to those left standing the victors, get the spoils. I.m 40% cash,..With no intention of selling anything...I'm tempted to believe the majority of Investors are with me?..Damned the Torpedoes(politics) .

Answer by Mr.2can
It's impossible to tell. The markets don't seem to move based on any type of logic anymore. A few rumors here and there and whoosh up we go. A few rumors here and there the other way, whoosh down we go. It's pure insanity. Case in point, while the indexes have been ticking upward, there is still massive volitility. In just the past month, of the stocks I track there have been a bunch who have seen 15-30+% drops. Suntech power (solar stock) RIMM Crocs Sprint Clearwire Netflix (it will be down 25% tomorrow morning after reporting earnings). So nothing makes sense. If we were in a 'recovery' you wouldn't expect to see these massive one-day 15-30% crashes in various stocks. Personally I think the market is being run up on anticipation of a plan for Europe. Should that plan turn out to be bullchit, look for a nice 5-15% crash in the market. We should know what the deal with Europe is by Wednesday. Anyway, anyone who says they can predict where this market is going is lying. The stock market has become a global virtual casino for the time being - play at your own risk.

Answer by David
Huge momentum going on this run up. Now entering Week #4 of moving higher without much of a reason. The Russell 2000 has skyrocketed nearly 20% from its low early this month. The markets finally escaped the confines of its eleven-week-long trading range just yesterday. The small caps have been emphatically stronger lately. Today, for instance, the Russell was up about three times as much as the S&P 500. Many of us have noticed that the big indexes are all within spitting distance of their 200-day moving averages. Nowhere is it written that prices aren't permitted to cross such levels. But it sure seems like time for a pause. Momentum is stretched like a rubber band. Any sign of weakness and the bears are hungry, could it be a feeding frenzy? Still a bear market rally so far. Watching closely at these levels for a rollover on the 15 and 30 minute charts. Gimme a nice separated lower high and I'm good to go short. If it doesn't break before the big news out on Wednesday from Europe, that may well be the shorting opportunity of the year (buy the rumor, sell the news), especially when we get some cold hard facts of how this is going to get done thrown on the flames of this rocket.

[stock market direction 2011]