Markets are trading with little sense of direction at this time as we wait for the second quarter earnings that will begin with General Electric (GE) next Friday.

After showing some recent improvement in market breadth, the bias remains neutral. Trading volume continues to be lackluster due to the summer and apprehension to take new positions.

The markets have shown some oversold buying over the past eight days but the upside has not been sustainable.

Markets will not be able to sustain any upside break unless we see the technical metrics improve.

Market sentiment remains quite weak. Take a look at the new high-new low ratio (NHNL). On the NYSE, we have not seen a bullish 70% reading since back on June 2 and May 9. In the technology sector, there have only been two readings at above 70% since May 10. Unless sentiment improves, the near-term upside will be limited.

Given the recent 10% plus correction on the NASDAQ and Russell 2000, there have been some decent opportunities to trade stocks. But if you are the worrisome type, you should stay out. This market is not for heroes. You do not have to sacrifice capital.

Risk adverse investors or traders may want to sidestep this market for now until we see some strengthening in the technical metrics.

But if you don’t mind assuming some risk, I believe there are some decent risk-to-reward trades out there given that stocks have sold off to levels that are more attractive.

Over the next several weeks with the end of the second quarter approaching, the market will turn its attention to quarterly earnings. For this market to jumpstart itself, we need to see strong quarterly results. If not, stocks may continue to edge lower.

See you soon!

George Leong is the founder of http://www.investornomics.com - a provider of independent stock and option trading commentary. He has a degree in finance/economics and offers over 15 years of research experience in investing and trading.

The most recent article "Lower Volume Trading Range" showed SPX held the cyclical bull market low, intermediate-term technical indicators may have bottomed, and an SPX 1,246 to 1,290 range may take place in July. However, the possibility of a rise above 1,290 should be taken into account.

The two charts below show daily SPX (right scales and candlesticks) and daily NYSE Oscillator (NYMO; left scales and green lines) in 2004 and currently with SPX 50 and 200-day MAs. NYMO closed above 72 on Monday, which is the highest level since early-June 2004.

The first chart shows SPX topped in March 2004 at 1,163 and began a volatile downtrend. The second chart shows SPX topped in May 2006 at 1,326 and also began a downtrend. The gray arrow in the 2004 chart may indicate SPX movements over the next month. The first two weeks of July tend to be bullish. So, it’s possible, SPX may rally into earnings season, stay high, and sell on the FOMC anouncement August 8th. A short-squeeze may be triggered above 1,290 with upside potential to around 1,310.

However, there are major differences between the 2004 and current charts. When the 2004 NYMO rose above 80, it began below negative 100 (both the high and low were historical extremes), while the current rise began slightly below negative 50. Also, SPX rose above the 50-day MA on the first bounce after the top in 2004. However, SPX failed to reach the 50-day MA on the first bounce after the top in 2006.

Over the 2004 downtrend, SPX made lower highs. So, 1,290 continues to be major resistance, and the 1,246 to 1,290 range may take place in July. Nonetheless, a sharp rise above 1,290 should be taken into account. Also, the charts indicate SPX will be much lower within three months, and SPX may bottom in October or sooner, perhaps below 1,200.

Free charts available at PeakTrader.com Forum Index Market Forecast category.

Arthur Albert Eckart is the founder and owner of PeakTrader. Arthur has worked for commercial banks, e.g. Wells Fargo, Banc One, and First Commerce Technologies, during the 1980s and 1990s. He has also worked for Janus Funds from 1999-00. Arthur Eckart has a BA & MA in Economics from the University of Colorado. He has worked on options portfolio optimization since 1998.

Mr Eckart has developed a comprehensive trading methodology using economics, portfolio optimization, and technical analysis to maximize return and minimize risk at the same time and over time. This methodology has resulted in excellent returns with low risk over the past four years.

The price chart below shows daily SPX (green line and right scale), daily NYSE Summation Index (NYSI; red line and left scale), and the NYSE Oscillator (NYMO) 50-day MA (blue line). Normally, when both NYSI and the NYMO 50-day MA rise, SPX also rises. Moreover, both NYSI and the NYMO 50-day MA fell to low enough levels recently to create an SPX intermediate-term bottom. Also, above the price chart is the CBOE Put/Call (CPC) 21-day MA and below the price chart is the CPC 50-day MA. Typically, a falling CPC 21-day MA is market bullish. Both the CPC 21 & 50 day MAs reached all-time highs recently, which are bullish, since CPC is a contrarian indicator.

Although these intermediate-term technical indicators are bullish, it doesn’t mean SPX will rise sharply. A volatile trading range may take place instead, until these indicators reach market neutral or bearish levels. At that point, the downtrend may resume. The indicators suggest SPX will not test the June low at 1,219 near term. However, a rise above 1,290 would be bullish to test the 1,326 high. SPX closed at roughly 1,265 Friday. Major resistance levels are 1,290 (downtrend high), and 1,280 (top of recent congestion area). Major support levels are 1,263 (slightly rising 200-day MA), 1,258 (top of prior congestion area), 1,253 (multi-year Fibonacci level), and 1,246 (previous support & resistance).

Chart available at PeakTrader.com Forum Index Market Forecast category.

Arthur Albert Eckart is the founder and owner of PeakTrader. Arthur has worked for commercial banks, e.g. Wells Fargo, Banc One, and First Commerce Technologies, during the 1980s and 1990s. He has also worked for Janus Funds from 1999-00. Arthur Eckart has a BA & MA in Economics from the University of Colorado. He has worked on options portfolio optimization since 1998.

Mr Eckart has developed a comprehensive trading methodology using economics, portfolio optimization, and technical analysis to maximize return and minimize risk at the same time and over time. This methodology has resulted in excellent returns with low risk over the past four years.

Penny stocks also referred to as small caps, micro caps and nano caps are low-priced issues, often highly speculative and selling less than $1 a share. Initially penny stocks were mostly a matter of derision but gradually over the years some of them have developed into investment caliber issues. “Penny stock is a high-risk stock that has a short or erratic history of revenues and earnings.”

A broader definition of penny stocks refers to the company’s market capitalization instead of its stock price. Market capitalization of a company is calculated by multiplying it stock price by the amount of shares outstanding. This number provides you with the total dollar value of all the shares in the organization at that instance of time.

A case in point can be Microsoft that has a market cap of around $300B and Dell that has a market cap of $70B. The classification of a company in small cap depends on the concerned broker. While for some organizations companies below $2b in market cap are considered to be small cap, for several others, small cap companies will only be under $1B.

Penny stocks have a great significance in the life of investors. With the help of penny stocks investors can incur huge gains in very short period of time as small as minutes and hours. Though the volatile market of penny stocks has many drawbacks yet the outweighing positive point is that investors can incur hefty benefits in nit just few days but in few hours.

Penny stocks are more enticing due to their cost-effectiveness. Unlike blue chip stocks the penny stocks demand less investment that can go a lot farther. For instance accumulating 10,000 shares of a penny stock can cost only $1000 dollars while same number of shares in a blue chip might cost as much as $10,000,000. Similarly penny stocks offer the advantage of occupying a large position in a company for minimum amount of money. For example a $5000 investment in a blue-chip company will provide the investor only a negligible share in the overall company whereas the same amount invested in penny stocks will offer you a complete 1% stake in the public company. Moreover if over the year that company expands and grows successful, your profits and shares can simply multiply.

However penny stocks too have quite a few shortcomings. The foremost disadvantage as is the volatility of the market. If on the one hand the volatility is beneficial for the investor on the other hand it can be fatal too. Investors can incur huge losses if the market fluctuates in an unwanted way. Due to the high-risk factor involved many investors completely stay away from investing in penny stocks and few others invest only a small amount of money in it.

Another drawback is that unlike stocks such as NYSE or NASDAQ, listed on more global exchanges, penny stocks have less financial disclosure requirements and release less reliable financial information in comparison to its other big counterparts. Moreover lack of easily accessible and trustworthy information about these companies provides space for temporary establishment of sham companies that can deceit and harm the investors.

Mansi Aggarwal recommends that you visit Penny Stock Research for more information.

When you write for an investing site, you see them all the time. You hear from the subscribers who are looking for that one stock pick they can invest their $500 in that is going to make them rich. Or ones who say they have a foolproof investing system, only to find that their method only works when the market is bullish. Notice there aren’t as many day trading or investing systems as there were back in the late 1990’s?

What you never see enough of though are investors who have an investment plan. A clear set of rules dictating when they will buy, how long they will hold, and where their stop loss is. This is what separates the successful investors from the rest. The cost of this investment strategy? A few minutes!

Its not difficult to get caught up in the emotion of investing in the stock market. The joys of when our research pays off with a profit, and the anguish and despair when we have to go against our own logic, and place that sell order. We’ve all been there. Unfortunately, we’ve done that a lot.

Its key to remember that the best investing strategy is capital preservation. While it makes sense when you read it, how many times have you watched a $200 loss turn into a $500 loss just because you thought for sure it would move higher? How many times have you turned that $500 loss into something worse?

A 50% loss means you need to make a 100% gain just to break even. While the world of investing in penny stocks provides opportunities, not many of them will give you a 100%. In the world of medium to large caps, it takes a long time with a successful company to get that 100% return.

QUit turning your small losses into larger losses.

Lets look at what you should include in your investment plan:

a) Starting capital. Its key to know how much capital you are putting at risk today. Its possible that you may invest in a company, only to learn later on that day that its shares are being delisted. Just because you invest $10 000 at the start of the day, doesn’t mean you will go home with that same amount. You need to set an amount that you are comfortable with. Capital preservation.

b) How much money are you prepared to lose per trade. Good traders ask themselves this question before they trade. If you are prepared to lose $500 today, establishing where to set your stop loss becomes easier.

c) Where is your stop loss? Are you basing your stop loss on share price? Are you basing your stop loss on the amount you are prepared to lose today? Are you basing your stop loss on a percentage of the trade or a percentage of your trading capital? What is your plan for a trailing stop loss?

d) Entry - where are you entering the trade? Is it based on a price? Are you trying to time the bottom? Are you placing a stop buy to take advantage of momentum? Was there news this morning?

d) How’d you sleep last night? If you are having one of those days where you wish you just stayed at home, then you should turn off the computer. Emotions will be running high, and you will make trading decisions based strictly on emotion, not your investment plan.

e) Duration of the trade. How long are you willing to stay in? If you are making a day trade, make it a day trade. Don’t justify holding a position for the long term if the stock doesnt move in the direction you want it to.

There’s the best investment advice that anyone can offer you. And it didnt cost you anything, but may save you thousands of dollars.

penny stocks - learn about the hottest penny stocks that will make the difference in your investment portfolio

In order to get consistently positive results from the online stock trading system, you have to have a system of your own. You wont consistently pull positive returns from online stocks if you follow a rag tag system. To help with your investing, here are a couple methods that will give you some direction as to where to start with your online stock trading system.

One system you can use is to buy equal dollar amounts of the 10 DJ stocks that have dividend yields. Hold these companies for one year, and then adjust your portfolio to hold the current “Dogs on the Dow”. What you are doing is buying companies who have decreased in favor and their stocks have lowered. The goal is to buy companies that have a high hope of rebounding, and therefore you will gain money out of it. There is an element of risk though because sometimes the companies don’t have substantial financial strength to pull them out of hard times and you could ultimately end up losing money.

Another method involves investing a fixed dollar amount monthly, or annually. If the prices increase, you will receive fewer shares for your money, while if they decrease you will receive more shares for your money. The price is up to you, and you will have to commit to not going over that price. Depending on the fluctuation of funds, you could lower the funds slightly. This strategy involves meeting a prescribed target by adjusting the amount invested, up or down. Dollar-cost averaging takes advantage of the 1/x curve non-linearity. Value averaging when the value is down goes in a little deeper and when value is up in a little less. But be careful because when you are dealing with a declining market neither approach will bail you out.

A last strategy is a system called “Hedging”. The most simple method of hedging, but also the most expensive, is where you buy stocks that you own a put in. To cover general market declines, buy a put option on the market, and sell financial futures to hedge.

The best, and least expensive, method of hedging is to buy stocks from one company, and then sell those stocks to the company’s competitor. Futures are the cheapest way to hedge an entire portfolio. Remember that the efficiency of the hedge depends on the estimated correlation between the broad market, and your high-beta portfolio.

These methods are just some of the ways that you can increase your profit, or lower risks in online trading. To become a professional online trader, find a system that works for you and stick with it 100% of the time. If you change your systems up and try new things, you could screw up your trading system more easily.

Online Stock Trading Secrets, Information and Resources at http://stocktrading.selfhelppage.com/

Load is defined as the fee or the commission that an investor pays to a mutual fund at the time of purchasing or redeeming the shares of the mutual fund.

If the commission is charged when the investor buys the shares, it is known as a front-end load. On the other hand if the commission is charged when the investors redeems his shares, it is known as a back-end load.

Certain funds apply back-end loads only if the shares are redeemed within a specific time period after being bought.

The argument for applying loads on mutual fund transactions is that these loads will discourage investors from trading frequently in mutual funds. If the investors quickly move in and out of mutual funds, the funds have to maintain a high cash position to meet these redemptions, which in turn decreases the returns of the funds. Also frequent trading means the expenses of the mutual funds go up.

There are various arguments against load funds:

-The fees that the mutual funds collect as loads are passed on to the fund brokers. The loads do not provide any incentive for the fund manager for better performance of the funds. In other words, a load fund has no reason why its managers should perform better than those of no-load funds.

-In the last few decades, no difference has been seen in the returns of load and no-load funds (if the loads are not considered.) When the loads are considered, the investors of load funds have actually gained less than the investors of no-load funds.

-When a sales person knows that he is going to get a commission from a load fund, he tends to push the load fund more - even when the load funds are performing poorly as compared to no-load funds.

-Loads are understated by mutual funds. If an investor invests $1000 in a fund with 5% front-end load, the actual investment is only $950. Thus his actual load is $50 in $950 investment - a 5.26% load.

If an investor is already invested in a load fund, it doesn’t make sense to exit now. The load has already been paid for. The hold or sell decision should now only be based on what the investor thinks about the future performance of the fund. In a few funds, the exit load depends on the period for which the fund was held.Check the details of the fund prospectus for more information.

In most cases it is better to avoid load funds; however, investors should keep one thing in mind. Sometimes load funds can be a better choice than no-load funds. For example, an investor has a choice of two classes in a fund - class A and class B. Class A has 3% front-end load and Class B has no load. The investor however misses the fine print, which states that Class B has 1% 12b-1 annual fees.

If the fund will make 10% gains each year, its return in Class A (starting with actual amount invested $970) will be

($970) X (1.10) X (1.10) X (1.10) X (1.10) X (1.10) = $1562

For Class B, the returns will be

($1000) X (1.10) X (0.99) X (1.10) X (0.99) X (1.10) X (0.99) X (1.10) X (0.99) X (1.10) X (0.99) = $1532.

Thus the above example is an exception, where in the long run, the load fund will perform better than the no-load fund (with 12b-1 fees).

The fact is that a no-load fund cannot be considered a true no-load fund, if it charges fees from it’s investors in the form of 12b-1 and other fees.

Sachin A is a freelance writer. To read more interesting articles on mutual funds and finance visit http://www.articlemanual.com

“ Most investors don’t even stop to consider how much business a company does. All they look at are earnings per share and net assets per share.” -Kenneth L Fisher, stock market guru.

" You’re neither right nor wrong because other people agree with you. You’re right because your facts are right and your reasoning is right-and that’s the only thing that makes you right.” -Warren Buffett, the world’s most successful investor.

There are two kinds of investors, be they large or small: those who don’t know where the market is headed, and those who don’t know that they don’t know. Then again, there is a third type of investor –the investment professional, who indeed knows that he or she doesn’t know, but whose livelihood depends upon appearing to know.” -Bernstein, William.

“ Investors must keep in mind that there’s a difference between a good company and a good stock. After all, you can buy a good car but pay too much for it .” -Richard Thaler.

“ Investment, if you like, is a math exam where the powers that be work out the answers based on new formulae they develop after your papers have been handed in.” -Dr Marc Faber, international stock market guru (famous bear)

“ The four most dangerous words in investing are, It’s different this time.” -Sir John Templeton, legendary investor.

"Give me a stock clerk with a goal and I’II give you a man who will make history. Give me a man with no goals and I’II give you a stock clerk.” -James Cash.

Visit http://www.sharemarketbasics.com to have your stock trading basics clear.

The stock market has fascinated people all through the years. Many have made fortunes, others have lost them investing and trading on the stock market. But what constitutes the stock market and how does it work?

Many countries have their own stock exchanges where one can buy and sell shares for company stocks, options and bonds that trade in that particular market. The US stock market is the most volatile of them all, where traders and brokers perform millions of transactions every day. The most common exchanges in the US stock market are the New York Stock Exchange, Nasdaq and the American Stock Exchange.

The Price
The stock market is a place where people, either on behalf of their clients, their organizations, or themselves, bid to buy a number of shares of a particular stock at a specific price. On the other side, another set of people asking to sell the same stock for a different price. These are technically called the ‘bid’ and the ‘ask’ price. When a price from the bidding side agrees with a price from the asking price, a trade is performed. In heavy volume transaction stocks, the difference between the ‘bid’ and the ‘ask’ price is marginal.

Why does the stock market fluctuate?
The answer to this is the variation between the supply and demand of the stock in question. In simple terms, when a particular stock is demanded heavily and the supply is short, the share price for the stock goes up since people are ready to buy that stock with a higher price than the current price, and people who want to sell are ready to wait and sell at higher prices.

When the reverse happens, people want to get rid of the stock but there are not enough people ready to meet the selling volume on the other side. As a result of this, the price goes down since people are willing to sell the stock at lower prices than the current price, and people who want to buy are ready to wait for the stock to go lower. The volume and quantity by which this happens relies heavily on the number of shares demanded against the number of shares supplied and the level of aggressiveness buyers and sellers (also known as bulls and bears) are buying and selling their stocks.

Shares Ownership
Once a number of shares are owned, as a result of a stock market transaction, these shares can be kept for a specified amount of time. This time can be years, months, weeks, days or even minutes. This depends on whether the shares have been bought for a long term investment (years and months), short term investment (weeks and days), or as a trading scalp, which normally lasts for hours, minutes, and sometimes even just a few seconds.

When entering the stock market, the first question one needs to ask is whether he/she wants to be an investor or a trader. This depends on whether one is looking for a long-term commitment or a short one. While investing in the stock market can be controlled quite easily, requiring only limited amount of knowledge, trading, on the other hand, is quite a different ball game requiring much more knowledge and skill to perform and master.

Sandro Azzopardi is a professional author who writes several articles on various subjects on his web site and local newspapers and magazines. You can visit information about this article and others on: http://www.theinfopit.com/business/stockmarket/stockmarket.php

The only way to learn to trade is by doing. Imaginary "paper trading" won’t cut it.

There is nothing like having real money on the line to test ones’ psychological reactions to fear and greed.

Learn to Trade is really about timing. Buying and holding a position over a period of years proves nothing. How one reacts in every sort of market is key.

Set up an "experience" fund consisting of 10% of your available risk capital but not more than $5,000 maximum.

Force yourself to trade in only one issue at a time; long or short. You can trade 100 shares of an average-priced stock, 50 shares of a high-priced stock, or 200 shares of a low-priced stock but only one issue at a time.

If a second issue looks attractive, force yourself to choose which one to go with.

Your goal is to always be long or short the most suitable stock at the moment. If you can’t find one, stay in cash until one shows up.

Look only for situations that look to yield potentially large gains. You won’t always hit "home runs" every time, but a lot of "singles" or "doubles" isn’t bad either.

Your goal should be to always show an "absolute" net trading profit each and every month. You’re not interested in performing "relatively" well compared to some market average.

There is only one trading rule that is always correct: Losses must always be "cut"!

They must be cut quickly, long before they become of any financial consequence.

It is impossible, in my opinion, to rack up an accumulation of net trading profits over a large number of trades, that includes both profits and losses, without being "good".

Learn to trade well enough and you just might be able to quit you’re day job.

Because No One Cares More About Your Money Than You

http://dynamic-stock-market-strategies.com

Good trading, Don Heggen