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OK, how do we think about gold prices? Well, my starting point is the old but very fine analysis by Henderson and Salant (pdf), which was actually the inspiration for my first good paper, on currency crises. H-S suggested that we start by modeling gold as an exhaustible resource subject to Hotelling pricing.

Here’s how it works. Imagine that there’s a fixed stock of gold available right now, and that over time this stock gradually disappears into real-world uses like dentistry. (Yes, gold gets mined, and there’s a more or less perpetual demand for gold that just sits there; never mind for now). The rate at which gold disappears into teeth — the flow demand for gold, in tons per year — depends on its real price.

http://krugman.blogs.nytimes.com/2011/09/06/treasuries-tips-and-gold-wonkish/

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Goldman Sachs is doing it again.  Goldman is telling the public that everything is going to be just fine, but meanwhile they are advising their top clients to bet on a huge financial collapse.  On August 16th, a 54 page report authored by Goldman strategist Alan Brazil was distributed to institutional clients.  The general public was not intended to see this report.  Fortunately, some folks over at the Wall Street Journal got their hands on a copy and they have filled us in on some of the details.  It turns out that Goldman Sachs secretly believes that an economic collapse is coming, and they have some very interesting ideas about how to make money in the turbulent financial environment that we will soon be entering.               http://theeconomiccollapseblog.com/archives/even-goldman-sachs-secretly-believes-that-an-economic-collapse-is-coming
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The VIX explained: Few really know what the Volatility Index is or how it is calculated. Here's are two brief explanations ... the first is a technical explanation, and the second is a description that investors can easily understand.

First, a brief technical explanation ... The Volatility Index (or VIX) is a weighted measure of theimplied volatility for real time $SPX put and call options

http://www.safehaven.com/article/22369/what-you-need-to-know-about-the-volatility-index-otherwise-referred-to-as-the-vix

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The markets are nearing a key resistance level. This should be short term resistance but probably not the end of the move up. The level on the S&P 500 is 1207. On the SPDR S&P 500 ETF (NYSE:SPY) the level coincides perfectly with $121.20. This level happens to be the pivot high from August 17th, 2011. The likely scenario is a stall-out here for a day or two, then a push through it to the $124.00 to $126.00 area. Once this next level it achieved, look for a significant pull back in the markets.

Reading the charts is everything. It told of the pivot bottom in the markets three weeks ago and the targets of each bounce and pull back. Learning how to decipher the charts is like having a crystal ball.

Gains are wide spread in most sectors. Financial plays are leading the pack. They have been the most oversold. JPMorgan Chase & Co. (NYSE:JPM) is trading at $37.21 +1.00 (+2.76%), Caterpillar Inc. (NYSE:CAT) is trading at $88.20 +3.04 (+3.57%) and Apple Inc. (NASDAQ:AAPL) is trading at $389.07 +5.49 (+1.43%).

Take the seven day free trial to the Research Center and Intra Day Stock Chat and get the same information given to the billion Dollar hedge funds. Get exact pivots in the market, stocks that will move, entries, exits and proprietary techniques for making big money.

Related: SPDR Dow Jones Industrial Average ETF (NYSE:DIA)


Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
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All day traders should know this, the week leading into options expiration is an extremely tough period to trade. This is a time when the large institutional trading desks will play a lot games with the small retail options traders. Take a look at the major stock indexes during an options expiration week on any intra-day time frame, you will see a pattern that looks like the Wasatch Mountains. The intra-day swings can make any trader sea sick if they did not take a dose of Dramamine before the opening bell. 

High probability chart patterns have a tendency of failing during this period as well. On a recent trading session, there was a solid head and shoulders top pattern carved out perfectly on the 10 minute chart. The target for the topping pattern signaled a nice potential $1.50 decline, however, the pattern failed forty minutes after triggering.  Another head and shoulder top formed on the intra-day chart signaling a nice $2.00 decline from the trigger to the target. This pattern also failed in just thirty minutes after the trade set up triggered. You see, understanding that it is options expiration week will help experienced day traders realize that nice clean chart setups that usually play out like clockwork can and will usually fail. This is a week of game playing by the institutional trading desks.

Often, when you day trade after the first two hours of the day during options expiration you are essentially swimming with sharks. That's right, you are swimming with great white sharks. The only difference is that the average day trader does not have a cage (knowledge) around him to protect him from the erratic intra-day swings. Some of the leading stocks that will be most volatile are the large technology stocks such as Apple Inc. (NASDAQ:AAPL), NetFlix Inc. (NASDAQ:NFLX), VMWare Inc. (NYSE:VMW), and Salesforce.com (NYSE:CRM). Just take a look at these stocks this week and you will easily see the volatile action in these names. It is best for day traders to take it slow during the week of options expiration as the action is usually trend-less. The week leading into options expiration is the real shark week for day traders. 

Do not bite the bait set out to catch the inexperienced. Trade with the best, learn and profit with them. The real Pro Traders at InTheMoneyStocks.com guide subscribers to financial freedom through two main services; the Intra Day Stock Chat is the only place a day trader or those wanting to view the Pros as they trade should be, and theResearch Center where the multi day swing trades which earn the Pros massive wealth are entering are revealed. Take a Free Trial to both services here.  Let the results guide you, grab control of your financial future now
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