How to find the bubble stocks

From time to time some stocks catch investors fancy and in a very short period of time double or triple. In most cases there is some “hope” story behind these stocks. These stocks can make breath taking moves before collapsing.Bubbles are more common when breadth becomes excessively bullish. These kind of periods are characterized by such irrational moves. To find these kind of periods look at the Market Monitor readings on Number of stocks up 50% in a month. When the readings climb over 20 you will notice big moves in many speculative stocks on marginal catalyst.These readings seldom climb above 20. For months you will see readings below 20, but once they climb above 20 you will notice the big speculative bubbles on handful of stocks, especially on…

via stockbee:

From time to time some stocks catch investors fancy and in a very short period of time double or triple. In most cases there is some “hope” story behind these stocks. These stocks can make breath taking moves before collapsing.

Bubbles are more common when breadth becomes excessively bullish. These kind of periods are characterized by such irrational moves. To find these kind of periods look at the Market Monitor readings on Number of stocks up 50% in a month. When the readings climb over 20 you will notice big moves in many speculative stocks on marginal catalyst.

These readings seldom climb above 20. For months you will see readings below 20, but once they climb above 20 you will notice the big speculative bubbles on handful of stocks, especially on low priced stocks and stocks with questionable fundamentals. They will make bigger moves during this period as speculative juices are in full flow during such periods.

As a momentum trader looking for such speculative excess period can offer you some good lottery ticket opportunities on low priced stocks. All such stocks rise up in momentum ranking during this period.

www.stockbee.biz If you are serious about your trading and want to build an enduring edge the Stockbee Member site might be for you. One of the most recommended site for learning to trade. 2200 plus members and growing everyday… www.stockbee.biz

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How to find the bubble stocks

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EUR Splutters, EM Dives While Investors See Red

via MarketPulse:

Tapering is not tightening – this well versed Fed fact seems to have fallen on deaf ears when you mention emerging market currencies. However, if you include some Chinese manufacturing contraction and dour employment numbers from the world’s second largest economy, emerging markets should be worried. The pull-back from EM currencies is showing no signs of a pause after the US Fed confirmed market expectations yesterday that it would pare its monthly bond buying by another $10-billion a month ($65-billion).

During this morning’s European session, it was the Hungarian forint’s (HUF) turn to bear the pressure, following in the footsteps of the Turkish lira (TRY) and South African Rand’s (ZAR) dismal display earlier in the week. EM currencies are finding it difficult to adjust to a new environment of restrictive monetary policy, particularly that of the US’s Fed. Despite the EM uncomfortable ride, analysts note that the impact of the pain from tapering is being expressed mostly through currency value readjustment – a certain positive that eventually makes EM currencies competitive again.

Currently, investor’s appetite for risk remains subdued. Risk-off sentiment following yesterday’s losses on Wall St., coupled with a less hawkish RBNZ statement and mixed with a soft final Chinese PMI (49.5) is weighing on commodity currencies like the AUD and NZD. Asian losses have been limited overnight, in part due to Chinese New Year holidays. However, the various asset classes were still capable of giving up most of the good from the Turkish central banks (CBRT) aggressive hike action from the previous session. The Kiwi in particular has fallen to a new month low of $0.8140, in the aftermath of the RBNZ overnight cash rate decision of standing “pat” at a record low rate of 2.50%. RBNZ did acknowledge “considerable momentum” for their economy and forecasted growth to be in line with 3.5% GDP in Q4. Adding weight to the NZD pressure was the mention from Governor Wheeler that the current high level of FX rate is “unsustainable” in the long run.

Europe and the EUR in particular are not escaping the investor’s wrath. It seems that the “deflation theme,” the ECB’s nemesis, has moved back to the front burner, particularly after the German State CPI’s for this month all registered negative month-over-month readings earlier this morning. The EUR has so far managed to penetrate the psychological €1.36 handle despite another improvement in German monthly Unemployment data (-28k, m/m). Not helping the single currency’s plight is that the regions confidence levels remain “patchy.” The market seems to have caught itself long the single currency, and the longer the EUR technically trades below 1.3665-75 will open up a “bear” channel to test support south of 1.3580 level.

The pound is not immune to its own fallout either. Sterling this morning has been pressured lower by a mixed bag of UK data – despite mortgage approvals being at a six-year high, the M4 money supply growth slowed sharply. Throw into the mix, the BoE’s Carney reiterating that UK’s recovery has a way to go before a rate hike, has also been adding pressure to the pound from the sidelines. Dealers remain comfortably short and expect losses to extend to the 30-day lower Bollinger Band (£1.6303) over the coming sessions. Expect capital markets to remain on edge as the PBoC and the Chinese government continue to struggle with domestic financial risks, and as investors adjust to further EM tightening.

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Central Banks Efforts Fade Fast

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EUR Splutters, EM Dives While Investors See Red

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Welcome back individual investors

This was on front page of IBD couple of days ago. The TD Ameritrade CEO was going gaga over how the individual investors are back in full force now that market is up several montha in a row.We had a discussion on members site about it and we discussed how it is time to really protect open profits and not get cocky and keep one eye on quick exit. I made 2 videos warning people to not get carried away.Extremely good momentum does not last forever. If you go to the Market Monitor tab on this site and see the column When the readings go above 20, it is a sign of excessive bullishness. It invariable leads to correction.This time there was a bit of delay…

via stockbee:

This was on front page of IBD couple of days ago. The TD Ameritrade CEO was going gaga over how the individual investors are back in full force now that market is up several montha in a row.

We had a discussion on members site about it and we discussed how it is time to really protect open profits and not get cocky and keep one eye on quick exit. I made 2 videos warning people to not get carried away.

Extremely good momentum does not last forever. If you go to the Market Monitor tab on this site and see the column

When the readings go above 20, it is a sign of excessive bullishness. It invariable leads to correction.

This time there was a bit of delay in selling hitting after it went up. But invariably this is what happens.

Seen this movie for 14 years …. I know how it always ends….

People get mesmerised by excessive momentum and forget where there cap is while looking at vertical moves.

By the time they realise what happened not only their cap but clothes are also missing….

And as to those individual investors who very excitedly entered the market now, well the market is teaching them nice lesson in how to be a bag holder….

Welcome back individual investors after missing a big rally.

The bags are in right corner. You can take as many as you want.

www.stockbee.biz If you are serious about your trading and want to build an enduring edge the Stockbee Member site might be for you. One of the most recommended site for learning to trade. 2200 members and growing everyday… www.stockbee.biz

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Friday’s Market Is As Cold As The Weather

via MarketPulse:

Capital Markets are trying to find their trading legs with participants yet to return to normal working conditions after the holiday shortened season. The northeast winter storm along the US and Canadian seaboard is not helping matters, guaranteeing even thinner trading conditions and liquidity remaining a premium. Next week, normal trading conditions should prevail with Friday’s NFP being the main event of the week. Will the US manage to keep their job momentum intact?

Several FED speakers are slated to speak at a conference in Philadelphia later today. Currently, the market expects what they say again to support riskier assets like equities. Few do not expect the FED to sway too far away from their recent rhetoric, reiteration of dovish tapering stance, buying of risk, allowing of bond yields to back up and the mighty dollar to advance against JPY (the patience trade of 2013), commodity currencies, and probably the EUR in the short term.

For now, the consensus risk scenario is “heavily weighted to the FED tightening earlier than advertised by forward guidance because economic slack is considerably less than indicated by Fed speakers.” Helicopter Ben and company (especially the doves) will be expected to push back on this train of thought today and in the immediate future. Policy members are required to portray a consensus force indicating that the FED are nowhere near to tightening policy rates – this would put a temporary stop to any further rise in bearish sentiment.

The dollar is ending the week consolidating most of Thursday’s gains against the EUR’s (1.3610-50) and GBP (1.6400 -50) while maintaining its weaker trend against the CAD (1.0610-40), AUD (0.8965-90) and NZD (0.8270-99).

Next week will be a different story; all hands will be on deck, a new playing field, but will the same game rules apply in 2014 as clearly as last year? Markets were handcuffed by Central Banks and have been for 18-months. With Helicopter Ben about to fly the coop will the old themes continue to dominate this year or are policy makers getting ahead of them themselves even with a token? Time will tell.

Happy New Year!

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Friday’s Market Is As Cold As The Weather

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