Tool #60 - Podcast #88 - US Debt Clock

Real Time running US Debt Clock broken out into many categories.


http://www.usdebtclock.org/

FMM - Swing Trade Daily Newsletter Trade - XLE Candle

6/19 - Here we are at the 50+200 day. go in the direction of a meaningful gap move.

6/22 - shorted the open (48.45) as stock breached the 50/200 day. stock resting on previous resist. which is now support. stop at 50. cover on a up open tom.

6/23 - stock opened up and covered (at 46.90) as stock is resting on support. will short again on a gap below 46.

Date

Share$

Shares

Amount

G/(L)

short

06/22/09

48.45

206

10,000

320

3.3%

06/23/09

46.90

206

9,680

Raleigh's Barrel Monster

Prosecute or innocent prank?

The Barrel Monster appeared on Hillsborough Street in late May and was later dismantled. Last week police charged its creator with misdemeanors.


RALEIGH - The Barrel Monster, a playful statue made of orange and white construction barrels, only had a few hours of life on Hillsborough Street but is basking in popularity as news spreads of its suspected creator's arrest by Raleigh police.
In the week since Joseph Carnevale, a student at N.C. State University, was arrested June 10, both he and the Barrel Monster have attracted attention from around the country, and even the world.

FMM - Swing Trade Daily Newsletter Trade - SPY Candle

Candle Portfolio Portion of the Swing Trade Newsletter

(chart annotations excerpt:)

6/11 - Go short on a lower open as resistance level was rejected again.
6/12 - Went short at the lower open (94.40) target 92, stop 96.
6/15 - Nice move to the downside closing near the lows of the day, but volume was on the light side.
6/16 - target of 92 achieved and covered short. Stock closed at the lows of the day as 200day comes into play.

Date

Share$

Shares

Amount

06/16/09

92.00

106

9,746

Date

Share$

Shares

Amount

G/(L)

short

06/12/09

94.40

106

10,000

254

2.6%

Tool #59 - Podcast #87 Net News Wire

NetNewsWire for iPhone - Free Mobile RSS Reader for Easy, On-the-Go Access to News & Information

NetNewsWire for iPhone is a free native application based on the award winning RSS feed reader for Mac. NetNewsWire for iPhone provides you with a lightweight, easy application for keeping up with feeds on the go and it syncs with NewsGator’s suite of RSS readers, including NewsGator Online.

RSS is the fastest and most efficient way to read your favorite news and with NetNewsWire for iPhone you can access feeds wherever you are.

http://www.newsgator.com/individuals/netnewswireiphone/default.aspx

Day Trade Newsletter Question - Capturing the Gaps

Question:

David-

Why not determine the setups prior to the close and take the trade at the close

instead of at the open the following day. You would capture all of those big gap moves,

often times the majority of the move.


Answer:

Great question. I do it as a form of risk management. I'm not looking to hit home runs and thus strike out to. I'm just trying to consistently hit singles and garner large returns over cumulative trades.

I have found that without the trend confirmation, I get large swings in my results which usually cancel each other out. Remember the trend is your friend.

But I see your point and it sure is tempting especially with the money left on the table yesterday.

Quote

I love this quote in relation to the banks and auto industry

"In business, the golden rule is all about the survival of the fittest not propping up the weakest."


thoughts...

Global Economic Trends

Some of the numbers are scary. Below are the annualized changes in real GDP recently announced for some of the largest trading partners for the U.S.

Japan -15.2%

Germany -14.4%

Mexico -21.5%

These declines were not an aberration. German real GDP was down for the fourth straight quarter and the first quarter plunge followed a drop at an 8% annual rate in the fourth quarter of 2008. Mexico had posted a near 10% drop in the fourth quarter.

Other economies are not faltering as badly as the three noted above. The Eurozone overall dropped at "only" a 9.7% annual rate.

China posted growth at an annual rate of 6.1%. That was down from 6.8% in the fourth quarter of last year and 13% in 2007.

Tool #58 - Podcast #86 Twitter Followers

This weeks tool in the crib is a list of stock market related people that I follow on Twitter. If you have someone that you would like to add, please email me or leave a comment on the blog post.

TraderInterview / Tim Bourquin
thestreet_tv / thestreettv
hedge_funds / Aaron @ HedgeCo
JimJCramer
planetmoney / NPR's Planet Money
freakonomics
madmoneycramer / Jim Cramer
cramertv / Jim Cramer
MadMoneyMachine / Paul Douglas Boyer
cnbctv / CNBC

Whats the best way to follow these people, is through a program called Tweet Deck. http://tweetdeck.com/beta/

FMM - Swing Trade Daily Newsletter Trade - IYT

Overbought / Oversold Indicator Portfolio Trade:

IYT (Transports)

Date

Share$

Shares

Amount

05/13/09

55.46

180

10,000

Date

Share$

Shares

Amount

G/(L)

06/02/09

60.17

180

10,849

849

8.5%

Bought at the next days open (5/13/09) when the indicator flashed an oversold status (blue line) and sold at the next days open (6/2/09) when the indicator flashed an overbought status.

FMM - Swing Trade Daily Newsletter Trade

Overbought / Oversold Indicator Portfolio Trade:

SMH (Semi Sector)

Date

Share$

Shares

Amount

05/12/09

19.98

501

10,000

Date

Share$

Shares

Amount

G/(L)

06/01/09

21.42

501

10,721

721

7.2%

Bought at the next days open when the indicator flashed an oversold status (blue line) and sold at the next days open when the indicator flashed an overbought status.

Leap in U.S. debt hits taxpayers with 12% more red ink

Check out this article on USA Today regarding our portion of the nations debt.

http://www.usatoday.com/news/washington/2009-05-28-debt_N.htm?csp=usat.me

FMM - Swing Trade Daily Newsletter Trade - XLE Candle

Candle Portfolio Portion of the Swing Trade Newsletter

(chart annotations excerpt:)

5/26 - bullish engulfing pattern today on decent volume. go long on a gap up open and trailing stop exit at the 200 day.
5/27 - went long on the gap up open (49.97) stock reversed just before the 200 day and reversed to the mid point of the prior days move., stop set at 46.
5/28 - exited long at (50.89) on a .30c trailing stop after crossing the 200 day as the 200 day has failed to hold for a 3rd time.

Date

Share$

Shares

Amount

05/27/09

49.97

200

10,000

Date

Share$

Shares

Amount

G/(L)

05/28/09

50.89

200

10,184

184

1.8%

Kiplinger's 2009 Best Cities

http://www.kiplinger.com/magazine/archives/2009/07/best-cities-2009-where-the-jobs-are.html

Best Cities: It's All About Jobs
Stable employment and new career opportunities give these cities an edge.


From Kiplinger's Personal Finance magazine, July 2009

What a difference a year makes. Last summer, the energy and finance sectors of the economy seemed to be thriving, and manufacturing was going strong.

No. 1: Huntsville, Alabama


No. 2: Albuquerque, New Mexico


No. 3: Washington D.C.


No. 4: Charlottesville, Virginia


No. 5: Athens, Georgia


No. 6: Olympia, Washington


No. 7: Madison, Wisconsin


No. 8: Austin, Texas


No. 9: Flagstaff, Arizona


No. 10: Raleigh, North Carolina
Raleigh still has an enviable economic base, built on three universities and Research Triangle Park, where employers in everything from biotech to computers still thrive.

The Fast Money Machine Swing Trade Daily Newsletter

The Fast Money Machine Swing Trade Daily Newsletter

The Fast Money Machine Swing Trade Daily Newsletter consists of three (3) separate portfolios: a Short Term Swing Trade Portfolio based on market indicators, a Short Term Swing Trade Portfolio based on technical analysis and candle charts, and a Long Term Swing Trade Portfolio based on the ARMS index moving averages.

Mission: The Fast Money Machine Swing Trade Daily Newsletter is designed to help all level of experience traders and investors from beginners to seasoned veterans diversify their portfolios through utilization of different investment strategies and not just obtaining diversification through different holdings.

It is my belief that ALL investment strategies will work from time to time and will fail from time to time. It is important to protect yourself and diversify your portfolio by having multiple strategies to minimize the risk of when a particular strategy is not performing in the market.

The Short Term Swing Trade Daily Newsletter is based on two key philosophies.

1) The market moves in waves. These waves take the market from periods of being overbought and to periods of being oversold. This can occur regardless of if the market is in a clear bullish uptrend, a bearish downtrend, or in a period of sideways consolidation. To properly capture these moves, we use several market indicators that are not influenced by human intervention, indicators such as my own S&P Oscillator, ARMs index, VIX volatility index, and my Sector Oscillators (Transports, Semis, S&P500, Energy and Financials). Long entry positions are given when the market becomes oversold and Long exit positions are given when the market becomes overbought and uses a 10% stop loss.

2) The market moves from levels of support to levels of resistance. These levels in the market provide good low risk entry points for going long the market as well as being able to short the market. Using candle chart patterns developed by Steve Nison, they can help us identify these trading opportunities.

The Fast Money Machine Swing Trade Daily Newsletter is delivered to the subscriber’s inbox each and every trading evening around 5pm (est.) with these market indicators and candle charts with my annotations. Positions can typically be entered the night before for action at the open the next morning and are typically exited a few days later again at the open. This allows for individuals to be able to trade without having to sit in front of a computer all day.

At just $19.99 a quarter or just $74.99 a year, the daily newsletter is priced so that even the beginner investor can take advantage of this service and learn how to invest and properly diversify their portfolios by implementing different investment strategies.

To start receiving the daily newsletter simply signup on the website, or email me noting which newsletter you wish to subscribe to. You will then receive a paypal invoice for the subscription costs. Simply pay via a credit card through paypals secure website.

Below is an excerpt of the daily newsletter .pdf file.

The Fast Money Machine Day Trade Daily Newsletter

The Fast Money Machine Day Trade Daily Newsletter

The Fast Money Machine Day Trade Daily Newsletter is based on Toby Crabel’s 1990 technical work summarized in his book, Day Trading With Short Term Price Patterns.

Mission: The Fast Money Machine Day Trade Daily Newsletter is designed to help all level of experience traders from beginners to seasoned veterans participate in the low risk, high reward day trade setups and further diversify their portfolios by adding a day trading strategy.

It is my belief that ALL trading strategies will work from time to time and will fail from time to time. It is important to protect yourself and diversify your portfolio by having multiple strategies to minimize the risk of when a particular strategy is not performing in the market.

The Day Trade Daily Newsletter is based on some of Toby Crabel’s philosophy:

• The market moves from a period of rest (contraction) to a period of movement (expansion).

The Fast Money Machine Day Trade Daily Newsletter summarizes eight technical patterns that Toby Crabel’s work has identified for trading the contraction to expansion market movement.

The Fast Money Machine Day Trade Daily Newsletter is delivered to the subscriber’s inbox each and every trading evening around 5pm (est.) with these eight technical setups. Orders can typically be entered the night before for action at the open the next morning and are exited at the next days close. This allows for individuals to be able to trade without having to sit in front of a computer all day.

At just $39.99 a quarter or just $149.99 a year, the daily newsletter is priced so that even the beginner investor can take advantage of this service and learn how to trade and properly diversify their portfolios by implementing different investment strategies.

To start receiving the daily newsletter simply signup on the website or email me noting that you wish to subscribe to the day trade daily newsletter. You will then receive a paypal invoice for the subscription costs. Simply pay via a credit card through paypals secure website.

Crisis Of Credit Presentation

http://www.crisisofcredit.com

2008 Results:

Portfolio#1 - Swing Trade Market Indicators
-11.5%

Portfolio#2 - Swing Trade Candle Charts
21.8%

Portfolio#3 - Day Trade
11.9%

S&P 500
-38.5%

Dow
-33.8%

email me to request a detailed copy of trades

Using a Money Manager?

Are you using a professional to manage your money??

- You work hard for the money you earn and save. It is imperative that your money works hard for you!! Saving is only step one. Managing your investments is even more important! State goals for your portfolio and measure them at least annually by measuring their performance to the S&P500 or some other market benchmark. If you hire someone to manage your investments, ensure that you measure there performance and keep track of there fees!! Your performance at your job gets measured, so should you're money managers!!

Market Timing Indicators

Market Timing Indicators:

1.

Arms Index - It is assumed that price tells what is happening, while volume tells how it is happening. To look at either factor alone, not taking the other into consideration, gives an incomplete, and often erroneous picture of the market. By comparing advancing stocks and declining stocks to the volume of trading occurring on those advances and declines it recognizes underlying pressures which are not apparent in just a price study. The basic formula for the calculation of the ARMS index is: (A / D) / (AV / DV).
Results that are under 1 are bullish, as the advancing stocks are receiving more than their share of the volume. Our signals to buy are produced not by other people buying but by other people selling. We are looking for situations where an emotion be it fear or greed has run for too long. This puts us into the contrarian camp. We want to trade against the crowd, recognizing those times when the public has let fear prevail over reason and has sold stocks indiscriminately. The buy signal on a 3 day moving average is 1.4 and sell at 0.6. The 4 day average gives better signals at 1.3 and 0.7. The 21 day average signals are at 1.2 and 0.75. Combining indexes, 21 day and the 55 day we would want to be in the market when the faster line is below the slower. We would want to be out of the market when the 21 day is above the 55 day. When the faster index is high it is bearish, when it is above the 55 index, it is more bearish than the norm for the market. The 4 day index and the 13 day index works as a short term indicator. Even longer values which seem effective are the 55 and the 89 day average. Newton Zinder was one of the people to recognized that a reading over 2 for two days in a row as a buy signal. Argus investments chose 2.65 as there buy signal for any one day and would sell 8 months later. There study covered 20 years of market history and resulted in 11 buys. Only 1 produced a loss. During this period the market was up 192 percent while the trades produced 441 percent and they would have been out of the market 1/2 of the time. Find what time frame works best for you!!

2.

Oscillator - the oscillator is a 10 day simple moving average based upon the net differential of the number of advancing stocks and declining stocks on the NYSE. Typically speaking, the oscillator is over 350 this is a sign that the market is overbought on a short term basis and when the indicator is below -275, the market is oversold on a short term basis.

Overbought and oversold have to do with momentum and not necessarily price. Just because a market has slid in a big way does not necessarily mean it is oversold -- and vice versa. Since this is a momentum-related measure, one should be more concerned with the magnitude rather than the actual level of the move. For example, a truly weak market can get oversold and stay oversold by simply gaining downside momentum. Because we are concerned with the magnitude of the oscillator, we use it to judge the strength of the move. A reading of less overbought (i.e., a lower peak) accompanied by a higher high in the Dow Jones Industrial Average would be considered a negative divergence, as the momentum on this move was less than the previous move.

Therefore, when we get a peak reading in the oscillator in conjunction with a high in the Dow or the S&P 500, we conclude the market is overbought. After the market backs off some and begins to rally again, we will measure the magnitude of that rally by watching to see if the oscillator can better its previous reading. If it betters its previous overbought reading, the momentum is intact. If it turns down shy of the previous peak, we conclude momentum is waning and label that a negative divergence. It says to be cautious in here. The same holds true for declining markets, where the tendency is for a market to become oversold.


3.

Volatility Index (VIX) - The CBOE Volatility Index® (VIX®) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. Since its introduction in 1993, VIX has been considered by many to be the world's premier barometer of investor sentiment and market volatility. The formula uses a kernel-smoothed estimator that takes as inputs the current market prices for all out-of-the-money calls and puts for the front month and second month expirations. The goal is to estimate the implied volatility of a synthetic, at-the-money option on the S&P 500 index, with 30 days to expiration.

Generally when the VIX is less than 11, the market is overbought. When the VIX is greater than 18 the market is oversold. This indicator is generally useful for more longer term investment entry points. http://finance.yahoo.com/q?s=%5EVIX

4.

Bull / Bear Ratio - The bull / bear ratio is a contrarian indicator, like most indicators and measures when people are becoming too bullish and / or too bearish. When the Bulls are greater than 60%, this indicates an overbought market. When the Bulls are less than 40%, this indicates an oversold market.

5.

Put / Call Ratio - The put / call ratio is also a contrarian indicator, like most indicators and measures when people are becoming too bullish and / or too bearish. When the p/c ratio is greater than 0.70, the market is oversold and provides a good indicator to buy. When the p/c ratio is less than 0.60, the market is generally overbought and provides a good indicator to sell.

Tips for Buying & Selling Individual Stocks

Tips for Buying & Selling Individual Stocks

Buying stocks? Use the below tips to maximize your profits and limit the downside!

* Buy in small lots and "leg" into a stock slowly building your position.
Example... Buying 100 shares? Buy 25 shares each week for a month.


Buy a cheap out of the money put as a strategy to protect your long term investments. If your investment goes down beyond the strike price, you will make money on the put, which will offset your stock loss. This will set in a floor and you can not lose any more money than your floor. (A put is a option contract, in which you are betting on the stock price to decline over a certain period of time)


Use a Stop Loss strategy for your short term investments - Setting a stop Loss Article - Removing emotion from your stocks is the best way to protect yourself from a loss. Set a stop limit for every short term investment. (8% - 10%) If the stock declines to your acceptable loss level, your stock will be automatically sold. Prevents you from hanging onto a stock that continues to slowly decline as your losses grow larger and larger.


Use Technical Analysis to help determine your entry and exit points.


Do your homework!! Never buying a stock without researching it first! Either use Fundamental Analysis or Technical Analysis before placing an order.

Options Simple Strategies

Options

Options allow you to leverage your investments to control more stock with less capital. However, an option is for a specific time period. (Expires 3rd week of each month)

*

Buy deep in the money options to avoid high intrinsic value costs which will evaporate with the expiration of time. - Buy options with enough of a time horizon.

Covered call writing:
Objective: You want to buy a stock low and sell an option against it when the stock is high. (when expectations are for a stagnate period in the stock or a slight decline, but you do not want to sell your stock.

Risk: Stock rises and you miss some of the gains.

Example: Buy 100 shares of xyz stock at $90/share. Stock moves to $110. Now sell a $120 option for $5.50. You will receive $550 immediately into your account from the sale of the option (100 x 5.50). If the stock goes above $120 you will be called out and will forfeit your stock and miss out on any of the upside above 120. Your stock profit will be $3,000 (120-90) Your option profit will be $550, thus your total profit would be$3,550. If the stock goes below $120, will not be exercised and you keep the stock and the $550 option profit.

Personal Budgeting Tips

Budgeting your finances is a very important and often overlooked function that everyone should perform. Do you have enough money in your checking account? Can you afford to save more for retirement? Should you set aside more money for investments or savings? Click on the links below to download the Excel Spreadsheets and start to better manage your personal finances.

Step #1 - Calculate your income tax status.

* Goal: You want to get your tax refund/balance due down to zero to accurately determine your monthly cash flow and not give the government an interest free loan. Tax Projection Worksheet (email me for a copy)

Step #2 - Adjust your paycheck withholding accordingly:

* Goal: Adjust your withholding based on step #1 to arrive at a zero tax due/ refund and determine your maximum 401K contribution. Update your W-4 with your employer and begin having the proper amount of taxes taken out of your paycheck.
Withholding Worksheet (email me for a copy)

Step #3 - Determine your monthly budget

* Goal: Get a handle on your monthly cash flow to maximize your savings and retirement contributions and keep track of the activity in your main checking account and general finances. Budget Checkbook Tracker (email me for a copy)

Money Saving Tips

Here is a list of money savings tips. Look how it all adds up!!
Skip the daily fast food breakfast and/or Starbucks coffee.
- Assumption Eliminate 3 days a week at $5 a day cost. $60 $720
Stop buying books and use your local library.
- Assumption eliminate 2 book purchases a month at $15 cost per book. $30 $360
Turn down your heat/air.
- Assumption turn down by 2 degrees ($150 X 5% $8 $90
Buy gas from the cheaper station.
- Assumption $0.05 savings/gallon (family 2 tanks/wk.) $8 $96
Use a credit card that give a 1% cash rewards.
- Assumption $1,000 c.c. purchases a month $10 $120
Switch to a credit card that offers 0% interest for one year for existing credit card carrying debt.
- Assumption $5,000 balance @ 8% $30 $360
Reduce your tax refund, don't give the government a free loan.
- Assumption $2,500 refund, 5% interest earned $11 $125
Eliminate your home phone and switch to cell phone.
- Assumption $60/mo. phone bill. $60 $720
Use coupons and member card when you grocery shop.
- Assumption $5 a week savings $20 $240
Grocery shop at walmart/target instead of regular grocer.
- Assumption average 5% savings $75/wk grocery bill $15 $180

TOTAL SAVINGS: Month / Year $252 $3,011

Jim's Ten Commandments Of Trading

Jim's ten commandments of trading

- never turn a trade (short term) into an investment. (long term)

- your first loss is your best loss.

- its okay to take a loss when you already have one.

- never turn a trading gain (short term) into a investment loss. (long term

- (stock) tips are for waiters.

- you don't have a profit until you sell.

- control losses, winners take care of themselves.

- don't fear missing anything.

- don't trade headlines.

- don't trade flow.

25 Investment Rules to Live By:

Jim's 25 investment rules to live by

- bulls make money, bears make money, pigs get slaughtered.

- its ok to pay the taxes.

- don't buy all at once.

- look for broken stocks not broken companies.

- diversification is the only free lunch.

- buy and homework, not buy and hold.

- no one ever made a dime by panicking.

- own the best of breed.

- he who defends everything defends nothing.

- the fundamentals must be good in takeovers.

- don't own too many stocks.

- cash and sitting on the sidelines are fine alternatives.

- no woulda, shoulda, coulda

- expect corrections.

- don't forget bonds.

- never subsidize losers with winners.

- hope is not part of the equation.

- be flexible.

- when high level people quit a company, something is wrong.

- patience is a virtue.

- just because someone says it on tv doesn't make it so.

- always wait 30 days after an earnings preannouncement.

- never underestimate the wall street promotion machine.

- be able to explain your stock picks to someone else.

- there is always a bull market somewhere.

Tool #57 - podcast #84 Elitetrader.com

o http://www.elitetrader.com/
o Welcome to Elite Trader, the #1 community for active traders of Stocks, Futures, Options, and Currencies.
 Forums – Reviews and Comments on
• Brokers
• Software
• Books

Tool#56 (see podcast 83) Barron’s Stock Picks & Pans

This feature tracks the performance of stocks Barron's has written about during 2009 -- both favorably and critically. For stocks featured in Barron's print magazine, prices are measured from the Friday before publication date to their current price. For stocks featured on Barrons.com, prices are measured from the trading day of publication date to their current price. This list includes U.S. stocks only, including ADRs, but not foreign stocks.

http://online.barrons.com/stockpicks-SC_BULL_P_2009_L

Tool#55 (see podcast 81) www.aaii.com

• American Association of Individual Investors
  • AAII is a nonprofit organization that arms individual investors with the education and tools they need to build wealth. From stock investing to financial planning and retirement funding, AAII covers all your needs
  • Get hookup up with the local chapters.
  • Just $29/ year subscription.

Tool#54 (see podcast 80) GDP

• GDP is calculated by adding four numbers: (1) consumption, (2) gross investment, (3) government spending and (4) net exports.
• o Consumption means short-term goods and services purchased by private consumers. Examples include rent, food, subway fares and entertainment.
• o Gross investment is the amount private companies and people spent to purchase goods and services intended for long-term usage. Examples include new homes and factories.
• o Government spending includes all expenditures by all levels of public agencies on both goods (i.e. procuring equipment) and services (salaries).
• o Net exports: The difference between the total value of all goods and services exported from the United States and those imported from abroad. If the next exports number is negative (as it has been since 1982), the United States is said to be running a trade deficit; the opposite is a trade surplus.

Tool#53 (see podcast 78) Wash Sales (IRC §1091)

Wash Sales (IRC §1091)
A loss from the sale of stock or securities in a wash sale is not deductible.

A wash sale occurs when a taxpayer sells stock at a loss and within 30 days before or after the sale:
1) Buys substantially identical stock or securities,
2) Acquires substantially identical stock or securities in a fully taxable trade
4) Buys substantially identical stock or securities in an individual
retirement account (IRA) or Roth IRA. (Rev. Rul. 2008-5)

Basis of acquired stock or securities. The basis of the newly acquired stock or securities is increased by the amount that has been disallowed due to the wash sale rules. This adjustment postpones the loss deduction until the new stock or securities are sold or traded. The holding period for the newly acquired stock or securities is extended to include the holding period for the stock or securities sold.

Example: I bought 100 shares of IMT stock for $5,000. Several months later I sold the shares for $4,000. Within 30 days from the date of the sale, I bought 100 shares of the same stock for $4,500.
Because I bought substantially identical stock, I cannot deduct my $1,000 loss on the sale.
My basis in the newly acquired stockis $5,500 ($4,500 cost + $1,000 disallowed loss).

Reporting a wash sale transaction. Report a wash sale transaction on line 1 or 8 of Schedule D. Enter the full amount of the loss in column (f). On the next line, enter “Wash Sale” in column (a), and enter the amount of the loss not allowed as a positive amount in column (f).

Trader. A trader in securities is engaged in the business of buying and selling securities for the trader’s own account. To be engaged in business as a trader in securities:
• A trader must seek to profit from daily market movements in the prices of securities and not from dividends, interest, or capital appreciation.
• Trading activity must be substantial.
• A trader must carry on the activity with continuity and regularity.
The following facts and circumstances should be considered in determining if a trading activity is a business.
• Typical holding periods for securities bought and sold.
• The frequency and dollar amount of trades during the year.
• The extent to which a taxpayer pursues the trading activity to
produce income for a livelihood.
• The amount of time devoted to the activity.

Mark to market election. A trader in securities may elect the mark to market accounting method. Under the mark to market method, securities held as a trader are treated as being sold and reacquired for FMV on the last day of the tax year. Gains and losses are treated as ordinary gains or losses and reported on Part II, Form 4797, instead of as capital gains or losses on Schedule D. The mark to market election does not apply to securities
held by a trader for investment. [IRC §475(f)] The election must be made by the original due date of the tax
year prior to the year for which the election is to be effective. For example, the mark to market election for tax year 2009 must be made by April 15, 2009. Approval from the IRS is not required, but once the election is made, it applies for all later tax years and cannot be revoked without IRS consent. The election is made by attaching a statement to the tax return (or extension request) that includes the following information.
• The taxpayer is making an election under Section 475(f) of the Internal Revenue Code.
• The first tax year for which the election is to be effective.
• The trade or business for which the taxpayer is making the election.
A taxpayer who makes the mark to market election must file Form 3115, Application for Change in Accounting Method, with the IRS. The change to mark to market is eligible for automatic consent for a change in accounting method.

Further, neither the limitations on capital losses nor the wash sale rules apply to traders using the mark-to-market method of accounting.
See also Publication 550

Tool#52 (see podcast 77) http://www.proshares.com/funds

• http://www.proshares.com/funds

Making complex strategies simple to execute

ProShares, part of ProFunds Group, the world's largest manager of short and leveraged funds,¹ takes exchange traded funds (ETFs) to the next level. We make it easy to implement complex investment strategies in a single trade. Like ordinary ETFs, ProShares offer a simple way to gain exposure to market indexes. But ProShares also provides innovative new ways to manage risk and enhance return potential in your portfolios.

ProShares give you the versatility you need to make the most of new opportunities—in both up and down markets. All as easily as trading a stock. Read about the risks of ProShares.

Short ProShares

Short ProShares are the first ETFs designed to go up when the indexes or benchmarks they are based on go down (and vice versa). Use them to seek profit in a market downturn or hedge an investment.

Tool#51 (see podcast 76) http://www.npr.org/blogs/money/

http://www.npr.org/blogs/money/

Planet Money is a multimedia team covering the global economy.

Lost in a galaxy of economic news? Listen to the Planet Money podcast.

Tool#50 (see podcast 75) http://www.istockmanager.com/

Tool#50 (see podcast 75) http://www.istockmanager.com/
For iphone and Ipod Touch

Tool#49 (see podcast 74) Back to Basics I and II podcast episodes

Back to Basics I and II podcast episodes

http://www.daytradingfreedom.com/

Tool#48 (see podcast 72) RiskGrades.com

RiskGrades.com

What is a RiskGrade™ Measure?

The Benchmark for Measuring Financial Risk A RiskGrade™ Measure is an open and transparent benchmark to measure the risk of the world's financial assets. A RiskGrade™ Measure: allows for a comparison of investment risk across all asset classes, regions, and currencies. varies over time to reflect asset specific information (e.g., the price of a stock reacting to an earnings release) and general market conditions. operates differently from traditional risk measures, such as beta, standard deviation, and average shortfall Find out much more in our RiskGrades™ Measurement Tools Help Center, or take a module of our Online Education course

Tool#47 (see podcast 70) Jim Cramer's Mad Money Soundboard

• Jim Cramer's Mad Money Soundboard
• http://www.cnbc.com/id/18724672/site/14081545/

Tool#46 (see podcast 68&69) William "Toby" Harrison Crabel

William "Toby" Harrison Crabel (born 1955)[1] is a United States self made millionaire commodities trader, The Financial Times called Crabel "the most well-known trader on the counter-trend side"[1]He is the fund manager of "Crabel Capital Management".[2] Crabel Capital Management ranked number 101 out of 196 funds on Absolute Return magazine list Absolute Return survey of U.S. groups with more than $1 billion AUM, July 2005.[3]. The latest current ranking of the top 196 money managers in the country. Mr Crabel manages 3.2 billion dollars and had a growth of 16.7% in 2005. A producer of consistent returns whatever the weather, Crabel has avoided having a losing year from 1991 to 2002. [2] Crabel is also an author, has written the book Day Trading with Short-term Price Patterns, which can be found on eBay for upwards of $1,000 a copy

Tool #45 (as heard on podcast #66) Shark Volume Chart - Beta Version

• http://www.sharkinvesting.com/volume.aspx
• Now the Shark Team can answer the perennial question: “How's volume today?” Most investors are aware of the importance of volume in the market, but until now, there hasn't been any convenient way for investors to track volume throughout the day and compare it to what has happened up to that point over the previous five trading sessions. Below is the Shark Team's beta version of our volume chart, which is updated every 20 minutes. In the coming weeks, look for our enhanced chart, which will feature roll-over functionality and user-defined time-frames.
• Please Note: The gray bar represents the total number of shares traded on a particular day. The corresponding blue bar will indicate how many shares had traded up to a particular time on each of those days, allowing you to see how today's volume compares to the number of shares traded up to that point on each of the previous days displayed.
• Nasdaq and the NYSE

Tool #44 http://electronicfuturestrader.com/

http://electronicfuturestrader.com/

Welcome to my podcast. I publish a new podcast twice a week. My podcast is available here and on iTunes by searching for either Jeff Quinto or the Electronic Trader with Jeff Quinto. I

Jeff Quintos - I have been involved in futures trading for the past 35 years. I was a floor trader at the KCBT for 10 years and, then, moved to Chicago where from 1993 to 2000, I was President of Rand Financial Services, Inc. After Rand, I co-owned a proprietary trading firm with offices in Chicago and Vienna Austria that specialized in trading Eurex Bund, Bobl and DAX. While in the proprietary trading business I oversaw the trading and helped coach dozens of electronic futures traders. Since 2005, I have been a partner in the Photon Trading Room where I serve as manager and trading coach. I help our traders from the Trading Room at 209 West Jackson in Chicago and around the world in our Electronic Trader Mentoring Program to be as consistently successful as they are able.

Signup for his free newsletter as well.

Tool #43 Money Girl Podcast

Money Girl provides short and friendly personal finance, real estate, and investing tips to help you grow your personal wealth. Whether planning for retirement or buying your first home, Money Girl is here to help you make sense of the expanding array of choices in 401(k) plans, IRA accounts, mutual funds, homeowner insurance, life insurance, income tax credit and deduction options, and all the other ways you can manage your money to lead a richer, more financially secure life. http://moneygirl.quickanddirtytips.com/

Tool #42 Barron’s Markets Data Center

• Barron’s Markets Data Center

Volumes of in-depth market data you can access NOW, FREE at www.barrons.com/data
• • • •		Real-time “dashboard” of key market indicators. Live data on most active stocks and sectors. Rollover charts for stocks and indexes. Ability to drill down into markets data on international trading, debt, currencies, commodities and futures.
	Plus REAL-TIME QUOTES for U.S. stocks… including pre- and post-market pricing!
			Check it out now, free at www.barrons.com/data

Tool #41 Planning Made Easy

Planning Made Easy – simple ratios to see if your on target to retire at age 65 with no debt and a nest egg equal to 12 times your salary.

Age Savings to Income Debt to Income Example $100k wage

30 0.1 1.7 10,000 / 170,000

35 0.9 1.5 90,000 / 150,000

40 1.7 1.25 170,000 / 125,000

45 3.0 1.00 300,000 / 100,000

50 4.5 0.75 450,000 / 75,000

55 6.5 0.50 650,000 / 50,000

60 8.8 0.20 880,000 / 20,000

65 12.0 0.00 1,200,000 / 0

Note: If you expect to receive a pension in retirement, first subtract the annual pension from current income first.

Note: Benchmarks are based on a savings of 12% of each paycheck, that your retirement savings will post a real, or after inflation return of 5% and that retirees can safely withdraw 5% of their nest egg each year.

Source: Charles J. Farrell www.fpanet.org/journal/articles/past_issues.cfm (2006 search Farrell)

Tool #40 Namefolio

o Namefolio

o http://apps.facebook.com/namefolio/

Find out what your name is worth on the stock market! NameFolio creates a stock portfolio based on your name, and then calculates the value using real stock ticker symbols and real stock market prices. Create your own NameFolio and see who’s worth more, you or your friends!

Tool #39 Reminiscences of a Stock Operator

You can read Reminiscences of a Stock Operator by Edwin Lefevre for free.

o http://stockvision.org/books/Edwin_Lefevre-Reminiscences_of_a_Stock_Operator-EN.pdf

o Reminiscences of a Stock Operator is the thinly disguised biography of Jesse Livermore, a remarkable character who first started speculating in New England bucket shops at the turn of the century. Livermore, who was banned from these shady operations because of his winning ways, soon moved to Wall Street where he made and lost his fortune several times over. What makes this book so valuable are the observations that Lefèvre records about investing, speculating, and the nature of the market itself. For example:

o "It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine--that is, they made no real money out of it. Men who can both be right and sit tight are uncommon."

o If you've ever spent weekends and nights puzzling over whether to buy, sell, or hold a position in whatever investment--be it stock, bonds, or pork bellies, you'll be glad that you read this book. Reminiscences of a Stock Operator is full of lessons that are as relevant today as they were in 1923 when the book was first published. Highly recommended. --Harry C. Edwards --This text refers to an out of print or unavailable edition of this title.

o "...certainly one of the most entertaining books ever written about stock trading..." (Money magazine, November 2007)

o "...is a classic that gives readers a sense of a trader's mind..." (Wall Street Journal, August 7, 2006)

Tool #38 Amazons Ranking of Top Books

Amazons Ranking of Top Books

o Link to Investing / Stocks

o Top rankings within investing include: Bonds, Commodities, Futures, Introduction, Mutual Funds, Options, Real Estate, Stocks

o Add RSS link to your Reeder as well.
http://www.amazon.com/gp/bestsellers/books/2674/ref=pd_zg_hrsr_b_2_4_last

Tool #37 Barrons Best Online Brokers Annual Report

• Barrons Best Online Brokers Annual Report

• http://online.barrons.com/public/article/SB120473693706413929.html

• • http://online.barrons.com/article/SB120554254483438485.html?mod=djemBMP&page=1

Tool #36 http://www.tigersharktrading.com/

http://www.tigersharktrading.com/

• TigerSharkTrading.com is a community of traders and those who want to learn trading. Most commentary and educational lessons are provided by professional traders. Topics of discussion include commentary and lessons on stocks, ETFs, futures, E-minis, currency, Forex, and options.
• Additional commentary and lessons are provided by TigerSharkTrading.com's Editor-in-Chief, Dave Mecklenburg, who scours the Web and publications for interesting content to share on TigerSharkTrading.com.
• TigerSharkTrading.com does accept paid advertising. Additionally, in exchange for articles and content, TigerSharkTrading.com does allow a one-sentence plug of an author's product or website at the very bottom of articles.

Tool #35 Average daily trading range

• Calculate your stocks average daily trading range for help in setting stop losses
• Click here for a Sample Spreadsheet

Tool #34 http://www.tradingsuccess.com/blog/

• Ray Barros is professional trader, fund manager, author, and educator. Since he started trading over twenty years ago, his track record shows that a hypothetical investment of $1,000 in 1990 would be worth in July 2008, over $230,000 . He is the author of ‘The Nature of Trends’ published by Wiley Press.
  
  Ray has been featured in regional newspapers and publications like Sydney Morning Herald, Your Trading Edge Magazine, Business Times, and Smart Investor. The interviews have focused on his trading strategies as well as his opinions on market sentiment. They have also dealt with his track record, trading philosophy, how and why he got into trading, and what advice he would give to those wishing to become traders/investors.
• Expectancy Return and Expectancy Ratio.
• (Avg$ Win x Win Rate) - (Avg$Loss x Loss Rate) = expected $ Return.
• Take the Expectancy Return and turn it into a ratio:
  (Ave$win x WinRate)/(Avg$Loss x Loss Rate) = Expectancy Ratio
• Click here for a Sample Spreadsheet

Tool #33 Mad Money Machine.com

• Mad Money Machine.com
• Mad Money Macine Podcast

Tool #32 · WisperNumber.com

WisperNumber.com - WhisperNumber.com is an independent research firm that collects earnings expectations from the investment public. The "whisper number" found here is unique and proprietary - it is the collective expectation of individual investors for quarterly earnings.

The key to using our data is understanding the price reaction of a stock after an earnings release. In other words when a company posts earnings that beat the whisper the stock is 'rewarded', miss and the stock is 'punished'.

· Earningswhispers.com

Tool #31 Dogs of the Dow

• Dogs of the Dow is a stock picking strategy devoted to selecting high dividend stocks.
• Investing in the Dogs of the Dow is relatively simple. After the stock market closes on the last day of the year, of the 30 stocks that make up the Dow Jones Industrial Average, select the ten stocks which have the highest dividend yield. Then simply get in touch with your broker and invest an equal dollar amount in each of these ten high yield stocks. Then hold these ten "Dogs of the Dow" for one year. Repeat these steps each and every year. That's it!
• would have given you a 17.7% average annual return since 1973! That's not bad, especially considering that the Dow Jones Industrial Average overall return was 11.9% during that same period
• - In 2003, the high dividend stocks of the Dogs of the Dow gained 28.7% and made new, all-time highs despite the massive bear market of 2000-2003!
• 2008 dogs of the dow are:
  • Citigroup
  • Pfizer
  • GM
  • Altria
  • Verizon
  • ATT
  • Dupont
  • JPM
  • GE
  • HD
• www.dogsofthedow.com

Tool #30 Quality of earnings

• Quality of earnings is cash flow from operations over net income plus depreciation
• Should approach 1. Cash flows from operations removes the bias of gaap accounting alternatives, mgmt judgements, and estimates. Depreciation is a default for any significant non cash items.

Tool #29 http://oonr7.blogspot.com/

• Trading Style is to use NR7 Bars

  o A narrow range bar (candle) is simply a bar which has a range from high to low that’s much less than the average bar for a given equity. You’ll NR7 means the narrowest range of the last seven bars.

Tool #28 http://tradermike.net/

• http://tradermike.net/
• http://tradermike.net/2006/06/tools_of_the_trade_how_i_work/
• Position Sizing Spreadsheet

Tool #27 http://traderx.blogspot.com

http://traderx.blogspot.com

• How I Trade, and Analyzing Charts
• http://traderx.blogspot.com/2005/06/how-i-trade-and-analyzing-charts.html
• I currently trade several different set-ups, but all are based on Price/Volume analysis and simple Fibonacci analysis. I use candlestick charts and am a student of candlestick formations and patterns.
  
  I normally trade set-ups on 30 and 15-minute charts. In general, I look for stocks that are moving strongly (up or down), pause (or pullback to key areas), and set-up with narrow range or inside bars. I also look for stocks that are moving strongly in one direction and reverse at an area of support, or reverse and move back through key areas that will trigger a trade for me.
  
  This is a very high-level description of what I look for - see the charts on this site for more information.

Finding the right set-up(s)

• http://traderx.blogspot.com/2005/12/finding-right-set-ups.html
• stocks that are moving - I mainly trade gaps, because those stocks have a high probability of having a sustained move
• I focus on big gaps - or gaps with a lot of "white space" (space between the previous day's close and current day's open).
• Before I enter a trade, I make sure it has room to move. Thus, I know my target (or, at least I know my target for the first 1/2). Is there room for it to move to the retracement of the previous day's high to the opening range (OR) low? Is there room for it to move to the Fibonacci extension. Is there enough profit potential if it stalls out at the previous high/low?

Trading FAQ

http://traderx.blogspot.com/2005/11/trading-faq.html

Anatomy of a trade

http://traderx.blogspot.com/2007/03/anatomy-of-trade.html

Tool #26 http://www.optiontradingsuccess.com/

Tool #25 http://www.ivolatility.com/

• IVolatility.com is an award-winning, revolutionary data service that provides all the information required by equity options traders for pre-trade analysis, post-trade decision support and risk management. IVolatility.com's database represents the most complete and accurate source of historical implied volatility (IV) and correlation data ever developed and can be accessed with a simple web browser or a direct data feed.
  
  Our audience is serious traders - both individual as well as institutional - who are looking for new tools to enhance their stock and equity option trading. IVolatility.com is invaluable to the most active traders in the world and it is the quickest and most direct route for your message to be seen every day by the global trading community.

Tool #24 Get emails from Barron's Online.

• Get emails from Barron's Online.
  Sign up here to receive selected email newsletters available for free to non-subscribers of Barron's Online.
• http://online.barrons.com/email-
• Barron's Daily Roundup
  Get alerts, exclusive features and columns throughout the week, including the popular Weekday Trader. Monday through Friday evenings
• Barron's Preview
  Get a sneak preview on Friday nights of the top stories from the weekend's Barron's magazine. Friday evening
• This Week's Barron's Magazine
  This weekly email offers a full list of stories and other features in this week's magazine. Saturday mornings
• This Week's Most Popular
  Get a weekly look at Barrons.com's most-popular stories -- including those with the most viewers online and those that were emailed the most. Thursdays
• http://online.barrons.com/email-

Tool #23 http://www.quotetracker.com/

QuoteTracker is a Windows program that integrates with various datafeeds, brokers and financial sites to provide you with streaming real-time quotes, Live intraday charts with Technical Indicators, Level II quotes, Time and Sales, alerts, news monitoring, and everything else you may need to trade in today's market.
It also ties into major brokers to give you full Integrated trading from within the software. You can trade through your own broker using QuoteTracker interface. Order Entry and transaction monitoring is fast and streamlined. Cannot beat the price - it's FREE!

Tool #22 Tradeideas

• What program do I use to Scan?
• Tradeideas
  • http://www.trade-ideas.com/
  • Trade-Ideas was created to bring the next generation of pre trade analysis technology to market. Our array of statistical analysis and pattern recognition servers connect directly to the exchanges and monitor every tick for every trade on the NASDAQ, AMEX, and NYSE. The servers keep statistical baselines on what is usual and unusual for any given stock, index, and ETF. User then can pick and choose different events to watch and filters to refine the universe of stocks being monitored. The result is an uninterrupted, real-time stream of actionable trade opportunities streamed directly to the users desktop.
  • Trade-Ideas is available in two forms, Web Based and Application Based.
  • http://www.trade-ideas.com/Help.html to see all the alert types
  • I believe it’s free for Scottrade Elite and Cybertrader customers.

Tool #21 The Day Trader's Toolkit:

The Day Trader's Toolkit: 100 Free Online Apps for Professionals

http://www.forexblog.org/2007/08/the-day-traders.html

Analyses
Blogs
Charts and Quotes
Economic Research
Earnings
IPO Info
Market Tools
Message Boards
News
Portfolio Trackers
Pre-Defined Scans and Signals
Stock Graders
Stock Research
Stock Screeners
Training

Tool #20 Trailing Stops

Would you please explain the concept of a Trailing Stop for me? - A trailing stop order will allow you to set a limit on the maximum possible loss, without limiting the possible gain. To understand the concept of a trailing stop order, let's first understand a basic stop order. A stop order will allow you to protect from losses by designating a minimum price to which you are willing to allow the stock to drop. Once this stop price is reached, your order would sell you out of the position. A trailing stop is different in that you are not specifying a price, but instead you are stating in points or by percentage the protection gap you would like to maintain. As the stock price rises, your trailing stop order price will maintain the gap you have specified and "trail" or adjust up as the stock price increases. However, your trailing stop price will never adjust down. So, if the stock price decreases, the trailing stop price will remain the same and could potentially cause your order to execute if the stock drops to your price. This allows your order to adjust for gains, but also protect from losses without having to continually modify the order. There are a few things you should be aware of regarding trailing stop orders. These orders are considered "not held,” which means they are not sent to a market center for execution until your trailing stop price has been reached. At that time, your order is triggered and sent to a market center for execution as a market order and will be filled at the current market price. The current market price could be different than your trailing stop price, especially if the stock price is moving quickly.

Tool #19 Trader Interviews.com Podcast & Idealabs

The Idea Lab is different than just a message board or forum. Traders propose "ideas" or thoughts about trading and other users indicate whether they agree or disagree by "buying" or "selling" the idea. Great ideas that get lots of "buys" end up floating to the top. Traders can also comment on ideas, suggest tweaks to the idea and vote on the comments to an idea as well. An idea can be as simple as something like "IBM seems to pull back every day around 10:30am Eastern - I suggest shorting it during that time" to more complex technical analysis that someone proposes on Dow Mini Futures.

As with everything we do at TraderInterviews.com, the Idea Lab is meant to give you things to consider that you may not have done in the past. It's also a way for you to flesh out ideas you may be considering and want feedback from your fellow traders. You can even subscribe with RSS to specific ideas so that you get notified automatically when new comments are posted.

Tool #18 Bollinger Bands

Bollinger Bands - Bollinger Bands, created by John Bollinger, are a type of envelope (or trading band) plotted at standard deviation levels above and below a moving average. Because standard deviation measures volatility, the bands widen during volatile markets and contract during calmer periods. Bollinger has the following to say about this indicator: o "Sharp price changes tend to occur after the bands tighten, after volatility lessens. o "When prices move outside the bands, a continuation of the current trend is implied. o "Bottoms and tops made outside the bands followed by bottoms and tops made inside the bands call for reversals in the trend. o "A move that originates at one band tends to go all the way to the other band. This observation is useful when projecting price targets indicator is displayed in two bands that are plotted at standard deviation levels above and below a moving average. BigCharts calculates the moving average using a time period of 20 bars, i.e., 20 frequency intervals. Bollinger Bands provide a view of the current trading range. They can be used with other indicators to determine when it’s time to buy or sell.

Tool #17 SMA Moving averages

• SMA Moving averages are among the most popular technical indicators. The traditional interpretation of moving averages focuses on price movement relative to the average itself. Investors are typically "bullish" when the price moves above its moving average and "bearish" when the price falls below its moving average. Moving averages are also very useful in smoothing noisy data. Applying a 200-bar moving average, for example, will give you a clear view of a security's long-term historical trend. A Simple Moving Average (SMA) is calculated by adding the closing prices for the most recent n intervals of time (or "bars") and then dividing by n. For example, a 21-bar moving average references the closing price of a security over the past 21 bars. The SMA gives equal weight to each bar.

  Some market technicians believe that more weight should be attributed to more recent price action. These analysts may prefer to use the Exponential Moving Average (EMA)

Tool #16 MFI - The Money Flow indicator

MFI - The Money Flow indicator attempts to measure the amount of money buying a stock vs. the amount of money selling a stock. It does this by assuming that when a stock closes higher than its open, all volume associated with that trading period results from buyers. It further assumes that when a stock closes lower than its open, all volume associated with that trading period results from sellers. Although these assumptions are overly simplistic, money flow can be a useful indicator when analyzing the general buying and selling pressure on a stock.

Tool #15 o OBV - On Balance Volume (OBV)

o OBV - On Balance Volume (OBV) is a momentum indicator that relates volume to price change. On Balance Volume is a running total of volume calculated by adding the day's volume to a cumulative total when the price closes up, and subtracting the day's volume when the security's price closes down. It shows if volume is flowing into or out of a security. When the security closes higher than the previous close, all of the day's volume is considered "up" volume. When the security closes lower than the previous close, all of the day's volume is considered "down" volume

Tool #14 Volume+ MACD

Volume+

o The Volume+ indicator identifies by colored bars when the trading volume contributed to a gain in price and when the trading volume was associated with a loss in price. The colors are labelled in the legend above the indicator.

o In addition to the color coding, the Volume+ indicator displays a symbol's 50-day average volume as a reference point.

MACD

o Gerald Appel's MACD (Moving Average Convergence/Divergence) indicator shows the relationship between two moving averages of prices. MACD is derived by dividing one moving average by another. It is based on the point spread difference between two exponential moving averages (EMA) of the closing price.

o The basic MACD trading rule is to sell when the MACD falls below its signal line and to buy when the MACD rises above its signal line.

o Some analysts use MACD as an oscillator and believe it is most effective in wide-swinging trading markets. They believe that when the MACD rises dramatically, it is likely that the security's price is overextending and will soon return to more realistic level

o Other analysts prefer to use MACD as a trend-following indicator, attempting to spot divergences in chart patterns. For example, a bearish divergence occurs when the MACD is making new lows while prices fail to reach new lows. A bullish divergence occurs when the MACD is making new highs while prices fail to reach new highs. These divergences are most significant when they occur at relatively overbought/oversold levels.

o The MACD indicator in BigCharts references the following default parameters:

o First Moving Average: 12 Bars

o Second Moving Average: 26 Bars

o Signal Line: 9 Bars

Tool #13 Books

• The Investor's Guide to Technical Analysis (Paperback)
• The Candlestick Course (Paperback)

Tool #12 StockCharts.com

Tool #11 RSI Relative Strength Index (RSI)

RSI Relative Strength Index (RSI) is a momentum indicator which measures a security's price relative to itself and its past performance, thereby indicating its internal strength. RSI quantifies price momentum. It depends solely on the changes in closing prices. RSI is less affected by sharp rises or drops in a security's price performance and, therefore, may give a better velocity reading than other indicators. RSI is calculated by taking the average of the closes of the up bars (the up frequency intervals) and dividing them by the average of the closes of the down bars. The time frame specified determines the volatility of the indicator. For instance, a 9-day time period under study will be more volatile than a 21-day time span. The RSI ranges between 0 and 100. RSI is said to indicate an "overbought" condition when it is above 80 and an "oversold" condition when it is below 20. However, the buy and sell level varies depending on the amount of bars used in the calculation. A shorter span of bars will result in a more volatile indicator which reaches further extremes. A longer amount of bars used in the calculation results in a less volatile reading which reaches extremes far less often. The RSI indicator in BigCharts references the following default parameters: Length: 14 Bars

Tool # 10 Stock Screeners

• MSN Deluxe Stock Screener Tool - http://moneycentral.msn.com/investor/controls/finderpro.asp
• Reuters Stock Screener Tool - http://www.investor.reuters.com/ArticleEntry.aspx?target=%2fopinion

Tool # 9 Fundamental Analysis Overview

• http://www.investopedia.com/university/fundamentalanalysis/
• http://www.thestreet.com/basics/fundamental/19519.html
• 

Tool #8 The Oscillator

• The oscillator is a 10 day simple moving average based upon the net differential of the number of advancing stocks and declining stocks on the NYSE. In simplistic terms, when the oscillator is over 350 this is a sign that the market is overbought on a short term basis and when the indicator is below -275, the market is oversold on a short term basis, but you can get more advanced than that and the levels can change in different markets (bull vs bear market)
• Overbought and oversold have to do with momentum and not necessarily price. Just because a market has slid in a big way does not necessarily mean it is oversold -- and vice versa. Since this is a momentum-related measure, one should be more concerned with the magnitude rather than the actual level of the move. For example, a truly weak market can get oversold and stay oversold by simply gaining downside momentum. Because we are concerned with the magnitude of the oscillator, we use it to judge the strength of the move. A reading of less overbought (i.e., a lower peak) accompanied by a higher high in the Dow Jones Industrial Average would be considered a negative divergence, as the momentum on this move was less than the previous move.

Tool #7 The Arms Index

• The Arms Index - An introduction to the volume analysis of stock and bond markets - Richard A Arms, 1989

• It is assumed that price tells what is happening , while volume tells how it is happening. To look at either factor alone, not taking the other into consideration, gives an incomplete, and often erroneous picture of the market.

• By comparing advances and declines to the volume of trading occuring on those advances and declines it recognizes underlying pressures which are not apparent in just a price study.

• The basic formula for the calculation of the ARMS index A/D / AV/DV

• Indices which are under 1 are bullish, as the advancing stocks are receiving more than their share of the volume.

• The original development of this index was done in order to try to understand the intraday gryations of the market.

• Our signals to buy are produced not by other people buying but by other people selling. We are looking for situations where an emotion be it fear or greed has run for too long. This puts us into the contrarian camp. We want to trade against the crowd, recognizing those times when the public has let fear prevail over reason and has sold stocks indiscriminately.

Tool #6 The Vix Indicator (^VIX)

Volatility Index (VIX) - The CBOE Volatility Index^® (VIX^®) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. Since its introduction in 1993, VIX has been considered by many to be the world's premier barometer of investor sentiment and market volatility. The formula uses a kernel-smoothed estimator that takes as inputs the current market prices for all out-of-the-money calls and puts for the front month and second month expirations. The goal is to estimate the implied volatility of a synthetic, at-the-money option on the S&P 500 index, with 30 days to expiration.

Generally when the VIX is less than 11, the market is overbought. When the VIX is greater than 18 the market is oversold. This indicator is generally useful for more longer term investment entry points. http://finance.yahoo.com/q?s=%5EVIX

Tool #5 - RevShark, Wstreet.com

The first website that I am recommending is RevShark’s Blog.
o You might recognize Rev Sharks name from the street.com. He is one of the popular blog writers for the paid subscription service on the Real Money portion of the street.com.
o James "Rev Shark" De Porre is the founder and CEO of Shark Asset Management, an SEC-registered investment advisory firm. He also operates sharkinvesting.com, an interactive online community that serves and educates active investors. De Porre holds business and law degrees from the University of Michigan, is a member of the Michigan Bar Association and a former tax attorney and CPA. He lives in Anna Maria Island, Fla.
o He offers a free daily newsletter. What’s great about this free daily newsletter is that he gives his opinion on the market at the end of each day. He also provides a chart of the S&P500, Nasdaq and the Russell each day and looks at technical levels and explains his technical anlaysis, current patterns, support and resistance lines.
o He’s doing part of the daily “market” homework for you.

The second website that I mentioned is Wstreet.com

• Let me read you a brief description from there website:
• Wall Street Strategies, Inc., is an independent stock market research company. The firm has successfully provided timely and effective equity advice since 1991 to money managers, brokers, and individual investors. Wall Street Strategies offers a suite of premium research products to a wide spectrum of individual, retail, and institutional clients.
• Charles V. Payne is the Founder, CEO and Chief Analyst of Wall Street Strategies. His stock selections reap sizable profits for his subscribers. He is in demand as a guest on several well-respected finance-oriented radio and television programs and he is widely recognized in the media as a leader in the analyst community. He is routinely sought after for his market opinions by several prestigious news organizations.
• What I encourage you to do is to complete the quick free registration form and Sign up for there mailing list to get twice daily Market Commentary from Charles Payne and the WStreet Research Desk.
• The daily emails are very insightful and informative regarding the daily ebb and flow of the market.
• What I like the most about this email newsletter is the charts that they imbed into there email newsletter. Economic data, retail sales figures, earnings data, you name it. He shares all his charts with you regarding the data of the day. It is a great free newsletter delivered to your inbox at least twice a day.

• I am stressing to you that you need to have a handle on the overall market before you can purchase individual stocks and these websites help with understanding the market and will aid in helping you determine when to enter and exit the market.
• That’s my two tools in the crib for this week, RevShark’s Blog and Wstreet.com’s daily email service.
• These four websites, In Play, Briefing.com, RevSharks Blog and Wstreet.com complete your first step in doing the homework, which is to gain an understanding of the market on a daily basis and these websites do all the work for you and allow you to spend a minimum amount of time gaining that understanding of the market.

Tool #4 - In Play Yahoo Finance and Briefing.com

This week I am giving you two tools. The first tool is yahoo finance and the second tool is briefing.com

• Now I am sure that most of you are aware of yahoo finance as it is an excellent financial website, but are you aware of the In Play page on Yahoo finance?
  • The In Play section of yahoo finance, provides you with live market analysis, updated each hour.
  • It will list market moving events and significant corporate press releases.
  • I look at this site at least 3 times a day to get a feel for what is driving the market. I simply spend a few minutes and quickly scan the minute by minute news items.
  • Say you are wondering why Valero is down 2 points on a particular day and you can’t find any news as to why. In Play may show that a broker downgraded TSO and that this downgrade is driving the entire refining sector down.
  • In investing, knowledge is key and In Play on Yahoo finance provides a brief broad view of the news of the day.
  • To bookmark In Play, go to finance.yahoo.com and click on the Todays Market link on the left of the page, then in the market coverage section, you will see a link to In Play.
• The second website that I mentioned is Briefing.com
  • Briefing.com offers a wide variety of market analysis, information and tools. They offer various paid subscription sites as well as a free site section as well.
  • I recommend going in the free section and clicking on email services. There you can sign up for free email notices on the market
    • I recommend subscribing to the before the bell, mid day and after the close email update. This email will summarize the markets 3 times a day for you along with providing a list of stock upgrades and downgrades.
    • I also recommend subscribing to the monthly brief to get an longer term overview of the market as a whole.
• That’s my two tools in the crib for this wee

Tool #3 - MSN Stock Quote Toolbar

This weeks tool is MSN’s Stock Quotes Toolbar.

• In researching stocks, you will most likely setup spreadsheets to keep track of the stocks you analyze for potential trades.
• MSN’s stock quote toolbar allows you to pull stock information from the web into your spreadsheets. It pulls the data in via a excel formula and you can reference these cells to perform additional analysis, which I will show you in future shows, exactly what type of homework you should be doing.
• MSN stock quotes toolbar allows you to pull in and update 52wk high, low, last price, ask, bid, eps, market cap, pe ratio, and volume.
• I discovered this tool from Paul Doglas Boyer at the Mad Money Machine as it was one of his tools in the crib. This tool has been a life saver for me and is absolutely critical tool to have in researching stocks. It is a time saver like you wouldn’t believe.

Tool #2 - Desktop Sidebar

Desktop Sidebar

• Desktop Sidebar
  • Last episode I provided you with Browster as my first tool in helping to speed up the homework time on researching stocks and looking at charts.
  • This weeks Tool is going to also help us to be more efficient in dissecting the tons of data that is out there.
  • This weeks tool is Desktop Sidebar.
    • I use desktop sidebar as an always on top newsfeed gatherer for all my websites and blogs.
    • Let me read you an exerpt from there website.
      • Desktop Sidebar provides you with instant access to the information you most desire by grabbing data from your PC and the internet. The result is a dynamic visual display you configure and control.
      • How can you make this possible? Choose from among a wide selection of information conduits (e.g. MS Outlook, toolbars, newsfeeds), called "panels". Fully customizable, Desktop Sidebar allows you to dock these panels to the edge of the screen, or arrange them anywhere on your desktop as you wish. All panels are configurable with a number of specific option.
    • I have to tell you in my opinion, this took blows away googles newsfeeder and is highly customizable and much easier to arrange your feeds than the other competing products.
    • On my sidebar, I have my time, local weather, stock quotes, computer performance monitor, and newsroom feeds, email notifier all in one little program docked on the side of my computer screen.
    • I get news from CNN, USA today, WSJ, Marketwatch, the street.com, Barrons, IBD, and local news as well.
    • I also get some unique feeds that I will share with you in upcoming tool segments.

Newsletter 2007 Results

2007 Results:

Portfolio#1 - Swing Trade Market Indicators
6%

Portfolio#2
n/a

S&P 500
3%

Dow
6%

Newsletter 2006 Results

2006 Results:

Portfolio#1
11%

Portfolio#2
n/a

S&P 500
14%

Dow
16%

Newsletter 2005 Results

2005 Results:

Portfolio#1 - Swing Trade Market Indicators
21%

Portfolio#2
n/a

S&P 500
3%

Dow
-1%