I had promised that I was going to start my own thread regarding stock investments and the markets. So many things have happened since last time I was here and I really do not feel like sharing my knowledge. But a promise is a promise and there have been few people that have emailed me and supported me.

This thread will deal with investing in the stock markets. I will not discuss individual stocks but discuss ETFs like SPY, DIA, IWM and QQQQ. The one good thing about trading ETFs compared to individual stocks is the the ETFs provide instant diversification among similar companies within the same sector.

I will post more as we go along, regarding entry-price, profit-target and stop-losses. I do not think that any ETF is good or bad. It is good only if I'm making money and bad if I'm losig money.

If you have not been in the market so far, please read this as an information piece only rather than my recommendations. There is risk involved and you should know how much risk to take on any position.

Any suggestations, comments and criticisms are welcome as long as it is market related. If this thread gets out of hand and we start discussing off-topics, I'll stop posting.

Have a happy new year!!!! May 2007 bring you and your family lots of joys and riches.

One of the things to understand is the business cycles and how they change and what are the causes and effects of differentl variables that affects business cycles. There are several variables but the major ones are current earnings, future earnings, inflation/interest rates and money supply. My strategy is based on money supply. Unlike what they teach you in business schools, I do not beleive in diversification. If the market is going up I want to buy, if it is going down I want to sell or be in cash. I'd rather wait for the market to start going up before I put my money in stocks.

Here are two books to read. These are a must if you want to get ahead.

How I trade for a living by Gary Smith,
How I made 2 million in stock market by Nicholas Darvas

I usually track the junk-bond funds and their performance before I look at the stock market. Junk bonds are issued by companies that have poor credit ratings. They provide a higher yield than regular bonds. If the junk bonds are doing good and the stock market is down 10%, I view that as a correction in an up-trend and if the stock market is down 10% and junk bonds are down 15%, that signals that it is the change in trend. When that happens, it is time to sell everything and get inot cash.

I do not use most of the technical indicators besides simple moving averages (ma). For S&P, I look at 65 day ma and 365 day ma. THese two moving averages act as support and provide me with my entry price. For exits, I look at 1% true selling day. What that means is when SPY, QQQQ, IWM and DIA are all down more than 1% on the same day, it is time to liquidate part of yur portfolio and get in cash. If you see another 1% true selling day within 2 days of the first one, it is time to get back in 100% cash and wait for another opportunity.

Wow eminitrader, excellent posts. I will definitely look into those strategies.

About the junk bond part, a 10% decline in a market is a lot, isn't that already a correction?

TT

Whats up fellows? So what you think about group? Anyone wanna take responsibility?
Anyways Happy New Year

peace

HAPPY NEW YEAR TO ALL THE MILLIONAIRES and MILLIONAIRES IN THE MAKING!!!!

Hi time traveller, a 10% decline is not a market correction, It is an indicator of what there more to come. Its more or less effected by private equity fund managers, who may not want to take ris, then junk can go 100 down and if they do risk budgeting then it might come up.
just a second thought without the first.

We already have a grou/disussion board in sajha. Here is the link: http://www.sajha.com/sajha/html/openforum.cfm?forum=273

Happy New year.

Timetraveller: Since 2002, there have been numerous times that the market has gone down 8-10% from their high and they have rebounded well. But the trick is to figure out whether that 10% decline is part of a corrrection in an uptrend or the reversal in the trend. That's where junk-bonds come into play. But I'll discuss my exit strategies later where you'll find that you'll get out before the big decline starts.

Awesome eminitrader and kaka ko bau (funny name)

Ready and hungry for more.

TT

Bump.

Hmm...I wonder how the markets willl fare tomorrow.

foreign markets had a good start to the week.

Ova n aut!

TT

Well, Mtorola dragged down samsung and other asian phone maker, i think the asian ones are actually not as bad, i would say it is a bargain right now. I put a call optin for a decent package of shares, hope it rebounds.

Two days of optimism shattered today. We need to remember, oil isn't the only driver of stocks.

A tiny bit of news on the economic front can shake things up pretty bad!

hey eminitrader and timetraveller or anybody

do u guys by chance have the new Motley Fool stock picks 2007 book ???


-lato

Lato, I do not have the book.

Anyway I haven't been able to update this thread for a while. My analysis shows that a correction is due and near. Do not put any new money in stocks right now. I would wait atleast a month before the dust settles.

No latoboy.

Motley fools advisors seem good. But even they charge comissions. The annual subscription fee? Strike a bell? So their claim about "Wall Street's commissions" is a bit unfounded though they do charge less. Most brokerages provided you with research reports, analytics, etc. And you'll have to pay them a comission to trade anyways. So go with your broker i'd say. As far as the "Fool's" picks are concerned, I'd NOT rely on them completely. Let's see how they fare in this possibly upcoming market correction.

I would so love to see them reccomend shorting strategies soon. :P

However, their "approach" on how and why they chose the stocks that are already up 200%, 300% etc are useful- that I will concede. Then again, many brokerage and websites probably provide that.

Follow?

Just waiting for eminitrader to come up with something good.

TT

Nasdaq has been showing some strength the last few days. I will put some money in tech stocks or you can buy QQQQ. If it goes higher, I'll add to my position.

.

Been a while since I traded, I found my confidence level to be so low today. I chickened out too soon and made hefty losses.

:(

I am bearish this time around. I still believe we're looking at a minor correction.

The technicals are showing it. AND I'M GETTING FRUSTRATED WITH MYSELF.

FU#$K !!!!!!