• Is the Stock Market Just a Big Casino?

    November 27, 2019 by

    I hear it all the time, “the stock market is just another way to gamble.” But is it a gamble or a calculated risk? Let’s back up a minute and talk about balloons. Yep, ballons! What happens when you keep pumping air into a balloon, over and over and over and over again? It eventually… Read more

  • Bond Yields are Inverse to Bonds

    November 25, 2019 by

    It’s true. Bond yields are inverse to whatever activity is happening in the bond market. What is up is actually down, and what is down is actually up… confused? Bonds are issued at face value with a coupon rate. For example: if I buy a bond for $100 (face value), it might have a coupon… Read more

  • Ominous Signs in this Market Indicator

    November 16, 2019 by

    The stock market has been on a rip lately. The S&P has risen well above 3000, and currently sits at 3120.5 (^GSPC Chart). But how high will we go without a pullback? More importantly, how big will that pull back be? Yesterday, while trying to find clues, I put the ‘On Balance Volume’ indicator on… Read more

  • The Leveraged ETF Killer!

    November 10, 2019 by

    Leveraged ETF’s can be a great way to make some good money. But there are risks associated with these ETF’s that are specific to them. That specific risk is called contango. Leveraged ETF’s use futures contracts to achieve their multiple. They may use any number of futures to achieve this: oil, corn, mini’s, soy beans,… Read more

  • How Does Short Selling Work?

    November 5, 2019 by

    Short selling is a way to potentially make money in a bear market. When stocks go down, you can profit. Crazy concept huh? After all, as the saying goes, “buy low, sell high.” With short selling, the saying goes, “sell high, buy low.” This is actually a strategy used by many, even in bull markets.… Read more

  • How Accurate Can They Be?

    November 2, 2019 by

    I have always been split 50/50 on the Market Efficiency Theory. What this theory suggests, is that all information is already baked into the share price. This is the premise behind technical analysis. If a stock is trading at $100 per share, market efficiency tells us that the share price is absolute (more or less)… Read more

  • The Put/Call Ratio Charts

    October 28, 2019 by

    In the Dumb Money Trader Facebook Group today, I posted this pic with the comment “I look at put/call ratios from time to time. In specific, $PCSP and $PCALL. Noticed that both bottomed today. Bottomed where they’ve been hitting bottom for quite some time. These charts sometimes coincide with what the market does – the… Read more

  • Record Close for SPY Today

    October 28, 2019 by

    What a GREAT day it was for my account! New highs, and new record close. I’m still bullish, but with caution. A couple good things to note from today. 1) Volume was kind of weak until the end. It wasn’t horrible, but it wasn’t great either. It did pick up and ended up closing with… Read more

  • RSI Divergence on S&P Futures

    October 27, 2019 by

    As soon as I started charting and prepping for tomorrow, I noticed that there is RSI divergence on the daily /ES (S&P E-mini) chart. Not only that, but there is declining volume as well. And it doesn’t end there… we are at all-time highs while all this is happening. Take a look at this chart… Read more

  • The Credit Spread

    October 24, 2019 by

    The credit spread is a very popular options strategy that, not only allows you to collect premium, but also limits your risk should the underlying do the opposite of what you thought it would. There are 2 types of credit spreads: Short put verticals, and short call verticals. They are also called bull put verticals,… Read more

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