COMMON SENSE

The definition of program trading does encompasses a range of
portfolio-trading strategies involving the purchase or sale of a
basket of at least 15 stocks with a total value of $1 million or
more. Last week, 50% and the week before 70%, of all the market’s
volume of trades was caused by program trading.
Who are these traders?

I have never seen oil, natural gas, gold, and inflation go higher
without causing a significant drop in the stock market. Just this
week, the Alcalde, Alan Greenspan issued two different warnings in
two separate speeches, which the market ignored.

Why did the market ignore these warnings?
The large fund managers have been controlling this market since 2004
with program trading. Their short sighted focus on next quarter
earnings will cause them to miss the secular bear market that we
have been in for the last 5 years. They, using your money, will
decide when the market moves, and the direction of the market.

Last week trim tabs reported that mutual fund inflows of new money
was on the rise. The news media stock cheerleaders were touting the
positive benefits of the two hurricanes hitting the country. They
brought in guests to proclaim “re-building” efforts would make the
market go higher and the small investor should be investing in ..xyz
company because they were going to make tons of money. After two
weeks of hype, money inflows were positive for mutual funds as
tracked by trim tabs research. Those individuals who put money to
work in the market were rewarded this week, just in time for the
quarterly reports and “window dressing.” It looks like this
September, the market will close on a positive note, but usually
when that happens, there will be hell to pay in October.

Look at what the Chairman said in his remarks to Business and
Economics meeting, “History cautions that extended periods of low
concern about credit risk have invariably been followed by reversal,
with an attendant fall in the prices of risky assets,

“Such developments apparently reflect not only market dynamics but
also the all-too-evident alternating and infectious bouts of human
euphoria and distress and the instability they engender,”

In a speech to the Mortgage banking assoc, he said,
“The apparent froth in housing markets may have spilled over into
mortgage markets. The dramatic increase in the prevalence of
interest-only loans, as well as the introduction of other, more-
exotic forms of adjustable-rate mortgages, are developments that
bear close scrutiny.”

“These products could be cause for some concern both because they
expose borrowers to more interest-rate and house-price risk than the
standard thirty-year, fixed-rate mortgage and because they are seen
as vehicles that enable marginally qualified, highly leveraged
borrowers to purchase homes at inflated prices. In the event of
widespread cooling in house prices, these borrowers, and the
institutions that service them, could be exposed to significant
losses. “

Greenspan is sounding the warning, only you can take the steps to protect your money by using the harmonic stock clock signals. Over the next few weeks, market timing will be critical with you short and long term goals. If you use the Harmonic Stock Clock signals, you may be able to protect your financial wealth when everyone else is losing theirs.

God Bless

Doc
www.doctrader.com

Ps. There is a possibility of a geopolitical event happening
between October 3rd to 15th.

Technorati Tags: banking, financial, Greenspan, market cycles, programmed trading, secular markets, stocks, street, wall

Doc’s Harmonic ClockThis site is intended for Stock Futures Index trading.
This site should be used for Educational purposes only.
No advice is given. No recommendations given.
You are considered to be over 18 years old.
Doctraders Harmonic Stock Clock predicts market reversals.
When trading furures,currencies,commodities, or stocks in world markets.
Use all Information on this site at your own risk.

God Bless America

Doctrader

Alcazar is saluting the retiring Alcalde

The Alcazar is saluting the retiring Alcalde. The master chemist of disquisition has been at the helm for almost 20 years, creating disquietude, while crocheting crinoline in the world’s economic biome. His inevitably incomplete knowledge and cognitive dissonance has become the epergne of world wide recognition. His alchemy of a structured and stable economy for the un-informed masses, has created many economic precipices during his reign. The abundant liquidity in the housing market, the stock market, the bond market has caused ephemeral illusions of wealth. The croupier hesitancy and lack of resolve to solve the looming fiscal problems will reward those members at his table while causing others to join the exponentially growing class of bindle stiffs.

Here are some disturbing excepts from the master of creating disquietude.

“Given our inevitably incomplete knowledge about key structural aspects of an ever-changing economy and the sometimes asymmetric costs or benefits of particular outcomes, the paradigm on which we have settled has come to involve, at its core, crucial elements of risk management. “

“Such an increase in market value is too often viewed by market participants as structural and permanent. To some extent, those higher values may be reflecting the increased flexibility and resilience of our economy. But what they perceive as newly abundant liquidity can readily disappear. Any onset of increased investor caution elevates risk premiums and, as a consequence, lowers asset values and promotes the liquidation of the debt that supported higher asset prices. This is the reason that history has not dealt kindly with the aftermath of protracted periods of low risk premiums.”

“Fear of change is also reflected in a hesitancy to face up to the difficult choices that will be required to resolve our looming fiscal problems.”

“If we can maintain an adequate degree of flexibility, some of America’s economic imbalances, most notably the large current account deficit and the housing boom, can be rectified by adjustments in prices, interest rates, and exchange rates rather than through more-wrenching changes in output, incomes, and employment.”

“Whether the currently elevated level of the wealth-to-income ratio will be sustained in the longer run remains to be seen.”

Speech by Chairman Alan Greenspan
Reflections on central banking

God Bless
Doctrader

Technorati Tags: Alcalde retiring, Alcazar, Commodities, currenciies, Greenspan, Index Trading, Investment, market, market cycles, Stock Futures, stocks, street, wall

Market Volatility Increases

By Doctrader

The month of October brings increased volatility to your long term financial plans. Given the historical significance of the month of October, there are steps you need to take now to protect any long term profits that you may have accumulated over the last 18 months. As I have stated in my book, “The Harmonic Stock Clock”, the market moves in cycles. The long term secular cycle is 18 years, while the short term cyclical is 9-18 months long. Do not confuse these two cycles; secular is 18 years, while cyclical markets last 9-18 months. You cannot afford to be a passive long term investor, like the previous 18 year secular market starting from 1982 to 2000.

This short term cyclical market is about over, starting in March of 2003 and lasting just 18 months, which will end in October.

The previous secular bull market cycle (1982-2000) produced spectacular gains with the advent of the personal computer in the first half of the secular market. During the second half of the secular bull market, there was the creation of the internet and telecommunications network throughout the world.

Traditional after a secular bull market, follows a secular bear market cycle lasting 18 years. Now a secular bear market cycle means that the indices do not reach a new all time high, but may retreat to new lows, down as much as 85% based on historical past market performances. I have on my website, www.doctrader.com the past secular markets, along with their six (6) correctional phases, alternating between cyclical bull and cyclical bear markets. Your financial future depends upon recognizing first the long term secular view, then encompassing the alternating cyclical markets within the long term secular trend.

However, there are many profitable opportunities for those who become an active investor! Those who remain passive investors over this secular bear market will be at the mercy of the increased market volatility to the downside. In my book, “The Harmonic Stock Clock”, you will be able to spot the market tops and the market bottoms by following the harmonic stock clock signal lines.

Based on your time frame, (day trading, swing trading, and long term trading) the harmonic stock clock’s signals can be used to take systematic profits as the market moves through the next cyclical market.

Looking back at March 2003, a short term cyclical bull market began with the indices making new lows, and reaching new three (3) year highs within nine (9) months. The market posted a spectacular gains!

Up over 80% for the NASDAQ and around 40% for the Dow Jone and S&P 500 Index. As I have pointed out in January of this year, 90% of the stocks were trading above their 200 day moving averages.

My prediction was a decline by 50% or having 45% of the stocks trading above their 200 day moving averages. This statistic is significant for the over all health of the market, but is very seldom reported. The Dow Jones Index and S&P 500 are slightly off their intermediate three (3) year highs, and passive complacency is the reaction to long term investors of indices mutual funds. There is more negative news that the financial news media chooses to ignore, hoping against all odds that their eternal optimistic view of the market’s health will be realized.

Unfortunately, most of the financial news media has a vested interest in keeping the majority of their viewers interested in “good news” only, caused by the advertising contracts. The financial news networks think that “buying is good”, and “selling is bad”. It is a view that is repeated over and over again until the average long term investor is lulled into passive complacency.

Things you won’t hear or read about unless you are a subscriber to this group: Medicare increases 17%, but there is no inflation!

Energy cost will soar as the Iraqi elections approach in January.
Program Trading is dominating the NYSE market, indicating market manipulation. The next cyclical market will be a short term bear market, new lows 45% down. Interest rates will begin to climb higher over the next 18 months.

Housing market bubble will begin to collapse with higher energy and interest rates. More stock accounting problems will be discovered more severe than Enron. The GDP will be revised downward to meet lowering expectation in earnings. The Federal Reserve is behind the curve on inflation and the “baby boomers”.

There are profitable opportunities in the above examples, however the majority of investors who are passive long term investors will miss these, but those who follow the harmonic stock clock signal will be profitable.

Hurry and get your copy of the “Harmonic Stock Clock” before October’s volatility turns your long term passive investments decisions into a depressed passive investor with long term losses.

God Bless

Doctrader

This site should be used for educational and training purposes only.

Doctrader’s Harmonic Stock Clock harmonic market cycles, trading and investing.
No advice is given. No recommendations given.

You are considered to be over 18 years old.
When trading futures,currencies,commodities,
stocks, and options know the risks!

Use all Information on this site at your own risk.

Doc

http://finance.groups.yahoo.com/group/docsstockclock/
http://www.freewebs.com/docsstockclock/
http://www.freewebs.com/docsstockclock/harmonicclockbook.htm

Technorati Tags: baby boomers, Black October, cyclical markets, funds, Investment, market cycles, Market Volatility, secular markets, stocks, street, wall

Doctrader

If you have been trading stocks or have been watching your long term gains slip away, then you have not been alone. It seems every “so called expert” agrees that you should do your homework by analyzing the companies. The experts usually have the track record of a weather forecaster. Some stock experts also recommend the very basic of technical charting, like the 50 and 200 day moving averages. I have found that reading the fundamental research to be very time consuming, as well as unpredictable when deciding to trade or invest in a stock. Because people’s opinion about a stock never made me dime, I chose to develop a system that relies strictly on technical analysis and market cycles.

You see if everyone likes the stock, but no one is buying the stock, the price will go down. If everyone hates the stock, but everyone is buying the stock, the price will go up. The old saying, “put your money where your mouth is” comes to mind. Have you noticed that everyone may love a stock and yet the price keeps declining, or everyone hates a stock, and yet the price keeps going higher? Some of the reasons can be found in contrarian investing, like the “dogs of the Dow” theory.

No matter what the market conditions are, bear market or bull market, there are stocks that go up and stocks that go down. If you follow the Harmonic Stock Clock signals, you can trade or invest in stocks that only go higher, selling those near the tops and preserving your profits from the inevitable market cycles of declines that happen to all stocks. If you follow the Harmonic Stock Clock signals you can sell short stocks for quicker profits on “bad news” or bear markets. If you use the Harmonic Stock Clock signals, you can play the highly leverage options, futures, and Forex markets. If you use the Harmonic Stock Clock you can protect your long-term gains in your pension plans, 401(k) plans by avoiding larger market down drafts.

By using my Chicken Straddle strategy, based on the Harmonic Stock Clock Signals, it didn’t matter if the news was good or bad, just as long as the stock moved either up or down to the next Harmonic Stock signal lines. Since a picture is worth a thousand words, I have posted all 70 Chicken Straddle Stocks in the group for you to judge for yourselves! http://finance.groups.yahoo.com/group/docsstockclock/

The primary scan for these stocks were, trading above all the signal lines that the Harmonic Stock Clock gives, and they had to have institutional ownership of at least 50% or more. Those who have traded options and were familiar with “spread trading”, could have used most of these stocks to swing trade the spread of puts and calls about every 2-3 days for quick easy profits. Some of these stocks may have had very little option interest, but those are the ones that will move the most when prices explode up or down. The low option open interest stocks have a higher risk than those like Qualcom that has 20,000 open interest contracts, so be careful and only use money you can afford to lose.

To learn more about options, get your free options toolbox at:
http://www.cboe.com/LearnCenter/Software.asp

This week, options are expiring for August, we may have more volatility to both the upside and downside with the big traders trying to hedge their declining portfolios.

For those who join the Yahoo group, http://finance.groups.yahoo.com/group/docsstockclock/

The charts will be posted in a zip file in the file section of the group. You will have free access to these and other charts for a limited time only.

God Bless

Doctrader
Doc’s Harmonic Clock
This site should be used for Educational purposes only.
No advice is given. No recommendations given.
You are considered to be over 18 years old.
Doctrader’s Harmonic Stock Clock identifies market cycles, short and long.
When trading futures,currencies,commodities, stocks and options in world markets. Use all Information on this site at your own risk.

Technorati Tags: chicken straddles, economics, Frustrating Fundemental, hedge, market cycles, pension plans, planning, recession, stocks, technical analysis, wall