New York Times thinks it is a problem when girls are smarter than boys

In “The Wage Gap Starts With Less Knowledge, and Lower Expectations”, the New York Times reports on a 2011 Schwab study where American teens were surveyed.  Boys expected a starting salary of $ 79,700 per year and a mid-career salary of $ 162,300. The Times provides no data on actual wages in the U.S.  A quick Google search reveals that the Bureau of Labor Statistics says that the median hourly wage across all occupations in the U.S. in May 2013 was $ 16.87 per hour (about $ 34,000 per year) and the average (mean) wage was $ 46,440. In other words, absent spectacular economic growth or inflation, the boys are overestimating their likely earnings by a factor of about 4X. Girls, on the other hand, overestimated their likely earnings by a factor of about 3X.

What conclusion does the Times draw from the fact that girls are better at estimating their future earnings than boys? “The girls of America seem to know less about money than boys, …”

Philip Greenspun’s Weblog

How to Put an End to Inconsistent Trading

A core Trading Frustration in the SMBU Community is a lack of consistency with their trading. In this video below Steve Spencer and I offer some solutions to improve your trading consistency.

The search for consistency is a differentiator between pro and developing trader.

Learning to develop a detailed trading plan for all of your trades will help.

In this post I was asked a question about consistency from a developing trader.

Do this everyday to be consistent!

Learn More About the SMB DNA Mentor Program | October 14 Class Limited to 40 Students

You can be better tomorrow than you are today!

Mike Bellafiore

 

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SMB Capital – Trading Education

The Harmonics in Honeywell

Written By: DragonFly Capital

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Honeywell, $ HON, is a stock with a great pedigree, but having a hard time since reaching a peak over 98 in July. Defense names have been hot, and while this is not a pure defense play it does have that aspect too. So with all the good background why is the stock doing so poorly? Harmonics!

hon

The high in July started a harmonic pattern that completed at point D in the chart above earlier this month. This is a bearish harmonic and you can see the result upon completion was a move lower. In fact the stock gave back 61.8% of the range of the pattern before the last 3 day consolidation. This is the target retracement that the harmonic pattern calls for. What that means is that the current level offers two trade opportunities. The first is that the pattern and retracement have played out and the stock reverses higher. A move over 94 would confirm this and offer a trade to the long side.The second is failure, and a full retracement of the pattern to 90.18. A move under the consolidation area to a new low would confirm a short entry.

Dragonfly Capital Views Anniversary Celebration

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This is nearly 20% off of the standard annual subscription price and over 40% off of a rolling monthly membership! Plus you get my book. Don’t miss this limited opportunity! Sign up here.

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SPY Trends and Influencers September 27, 2014

Written By: DragonFly Capital

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A weekly excerpt from the Macro Review analysis sent to subscribers on 10 markets and two timeframes.

Last week’s review of the macro market indicators suggested, as we closed the books on the September Options cycle and moved into Fall, that the equity markets were still strong but a bit tired. Elsewhere looked for Gold ($ GLD) to continue lower along with Crude Oil ($ USO). The US Dollar Index ($ UUP) continued to look strong while US Treasuries ($ TLT) were bouncing in their downtrend. The Shanghai Composite ($ SSEC) was also strong and looked better to the upside while Emerging Markets ($ EEM) were biased to the downside. Volatility ($ VIX) looked to remain subdued keeping the bias higher for the equity index ETF’s $ SPY, $ IWM and $ QQQ. The SPY and QQQ looked the strongest but on the weekly timeframe, with some cracks on the daily charts. The IWM looked weak in the short run and likely to continue towards the bottom if its consolidation zone.

The week played out with Gold holding up over the round number 1200 while Crude Oil bounced and started higher. The US Dollar continued its move higher and Treasuries extended their move up. The Shanghai Composite muddled along sideways until pressing higher late in the week while Emerging Markets continued their slide. Volatility popped higher, but remains at low levels. The Equity Index ETF’s started the week lower and made 1 month lows before a slight recovery Friday. What does this mean for the coming week? Lets look at some charts.

As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

SPY Daily, $ SPY
spy d
SPY Weekly, $ SPY
spy w

The SPY started the week lower, moving under the 20 day SMA. From there the 50 day SMA gave it a brief respite before heading back lower Thursday. Friday printed an inside day, or Harami, over the 100 day SMA. The RSI continues to trend lower with a MACD falling on the daily chart. These support more downside. The 100 day SMA below has been about where pullbacks have stopped the 2 years and will be in focus this coming week. The weekly chart shows a touch at rising trend support that has been in place since October 2011. The RSI is falling but in the bullish zone with a MACD that has crossed down and falling. More downside in store? There is support at 196.50 and 195 followed by 194 and 193. Resistance higher comes at 198.30 and 199 followed by 200 and 201.50 before 201.85. Pullback Continues in Uptrend.

Closing out the 3rd Quarter, the equity indexes are in retrench mode but without major damage yet. Elsewhere look for Gold to bounce around and possible rise in the downtrend while Crude Oil has a similar read with a reversal in the works, maybe. The US Dollar Index remains on fire, and maybe a little too hot in need of a rest while US Treasuries are moving higher. The Shanghai Composite remains strong and looks to go higher while Emerging Markets are biased to the downside. Volatility looks to remain subdued but with a risk higher keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. The indexes themselves are looking better to the downside in the short run, with the IWM near support and the QQQ strong on the longer scale with the SPY likely to see a bit more downside. Use this information as you prepare for the coming week and trad’em well.

Join the Premium Users and you can view the Full Version with 20 detailed charts and analysis: Macro Week in Review/Preview September 26, 2014

Dragonfly Capital Views Anniversary Celebration

For a limited time the Opportunity to join the Dragonfly Capital Views Premium Membership on an Annual basis is available for only $ 618. And every new Annual or converted subscription gets a free copy of my book.

This is nearly 20% off of the standard annual subscription price and over 40% off of a rolling monthly membership! Plus you get my book. Don’t miss this limited opportunity! Sign up here.

The post SPY Trends and Influencers September 27, 2014 appeared first on Dragonfly Capital.

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Studying the Stealthily Strong Trender Disney DIS

You may not be aware that Disney (DIS) is one of the strongest trending stocks in the Dow Jones and S&P 500 right now and has been since its breakout in mid-2012.

Let’s start with the Monthly Chart (where the magic is) and study this stock from there:

I wanted to focus this post on the purity of the price trend in motion for Disney (DIS) shares.

Note the typical sideways long-term consolidation from the 2000 peak to the 2002/2003 low into the peak near 2007 and the retest of the bottom of 2009.

Many stocks show a similar pattern (top in 2000, bottom near 2002, top again in 2007, bottom again in 2009) and other stocks also share breakouts to new all-time highs in the 2012/2013 period, but there’s something special – if not magical – about Disney shares.

The strength and persistence of the strong uptrend that took place in mid-2012 carried price almost straight up into the current $ 90 per share level (doubling from the $ 45 per share resistance).

This isn’t a pattern we see often and it’s certainly not a pattern we see for the typical Dow or leading S&P 500 stock (or a company as well-known as Disney).

Nevertheless, the stock speaks to the strength of uptrends and the preference for pro-trending strategies such as buying retracements or breakouts (instead of trying to call that illusory top or bottom… which is possible but extremely difficult).

The weekly chart further confirms the trend strength over the last few years:

Remember the $ 45.00 level as the multi-year resistance high and then note the breakout – then pullback to this level – then second breakout during 2012.

This breakout set the stage for the persistent (strong) uptrend that actually began with the 2011 price low but continued with the bullish money flow after the breakout to new highs.

In a strong trending stock, we often reference the rising 20 or 50 week EMAs (which is the case now in the S&P 500 as I wrote earlier in the week).

A pullback to this level can offer a favorable risk/reward entry into a swing trading (or longer) position (placing and trailing the stop under the 20 or 50 EMA depending on your risk tolerance).

We do note divergences in a lengthy trend which tempers the bullishness and we’re currently seeing another pullback (retracement) to the rising 20 week EMA it would appear.

The Daily Chart also shows persistent strength and shorter-term entry signals (bullish swing trades) into a strong trending stock:

The chart above details the breakout and pullback ahead of the 2013 sustained rally (green uptrend).

Yes, we’re still seeing negative volume and momentum divergences yet the trend remains strong and there is no sell signal until price firmly breaks under the rising parallel trendline channel or a weekly EMA level.

Watch the current pullback cautiously to see if support holds or else fails and otherwise be sure to study the charts as a reference for the concept of “Strong Getting Stronger” in terms of simple strategies to join a trend rather than fight against it.

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Corey Rosenbloom, CMT
Afraid to Trade.com

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

MATD Early Bird ALWAYS Gets the Worm

Some have asked lately why trade Globex? Many have also said they’re “a-scared” of doing so.

As I’ve stated 1,000 times, the prime MATD entry on key prior day support typically occurs during the Europe session, and you have to simply do what others can’t, won’t, or don’t know how to do … as in putting in farmer’s hours if you’re in the U.S.

The ONLY three things keeping the small minority of successful traders who have figured this business from earning consistent income remain motivation, focus, and simply showing up when most others won’t.

Don Miller’s S&P Trading Tank

President Obama visits the Upper West Side of Manhattan for a fundraiser

A friend who lives on the Upper West Side send me this link to a video of President Obama traveling to a mansion for a fundraiser yesterday. The taxpayers bought gasoline and paid drivers for 41 vehicles according to a commenter on the post.

Philip Greenspun’s Weblog

How I Traded Two IPOs Today ($CYBR and $CFG)

Watch Bella explain how he traded two excellent IPO opportunities today.  You might notice both were not named Alibaba :)

“You can be better tomorrow than you are today!”
Mike Bellafiore is the Co-Founder of SMB Capital and SMBU, which provides trading education in stocks, options, forex and futures. Bella is the author of One Good Trade and The PlayBook.

He welcomes your trading questions at mbellafiore@smbcap.com.

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SMB Capital – Trading Education

STTG Market Recap September 24, 2014

U.S. indexes rallied after a quiet open as yesterday’s negative economic news out of Europe had some believing the European Central Bank will be forced to be even more aggressive in monetary stimulus – hence bad news = good news. Combined with a very oversold short term condition we had parameters for today’s bounce. The S&P 500 added 0.78% and the NASDAQ 1.01%. We did have two…

Read the full article at StockTradingToGo.com


Stock Trading To Go

Booking a Long Term Stay in Choice Hotels

Written By: DragonFly Capital

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During the last half of August Choice hotels, $ CHH, stock had an incredible run higher. 17 days in a row moving higher. Since the start of September though it has pulled back but is leveling. Will it make another 17 day run? Maybe. Take a look.

chh

The chart above shows 3 technical reasons to look for higher prices. First, the AB=CD pattern should it continue higher from here would target a move to 60.20. Next the pullback was shallow, retracing only 38.2% of the prior leg higher. This is a sign of strength. Third the momentum indicator RSI is bottoming and settling in the bullish zone, and may be moving higher. All that is left now is for price to confirm by moving over the 53.20 trigger.

Dragonfly Capital Views Anniversary Celebration

For a limited time the Opportunity to join the Dragonfly Capital Views Premium Membership on an Annual basis is available for only $ 618. And every new Annual or converted subscription gets a free copy of my book.

This is nearly 20% off of the standard annual subscription price and over 40% off of a rolling monthly membership! Plus you get my book. Don’t miss this limited opportunity! Sign up here.

The post Booking a Long Term Stay in Choice Hotels appeared first on Dragonfly Capital.

Dragonfly Capital

Breaking Bad Questions

Friends finally convinced me to watch Breaking Bad. Here are a few questions about the series, in no particular order…

Why do all of the meth customers seem to be in extremely poor health? The Wikipedia article on meth says that the drug was heavily used by the Germany military during World War II yet it is hard to imagine a fearsome or successful army of meth heads from Breaking Bad. The Wikipedia article says that Americans interested in losing weight took the drug all through the 1950s and 1960s. They weren’t called “meth-heads”. What makes meth circa 2010 so much more dangerous than meth circa 1940 or 1960? [This Washington Post article says that many meth users are “functional” so perhaps this is like peanuts, which have gone from “staple” to “poison” during my own lifetime.]

I got on the subject of Breaking Bad with a divorce litigator that I interviewed for a book project. She asked “Why does Jane [Margolis, Jesse’s girlfriend, an attractive apparently healthy young woman,] get so excited about $ 500,000 in cash? If she wanted money without working she could just collect child support.” [Note that Jane lives in New Mexico, a state where unlimited child support is available and a couple of one-night encounters with high-income guys would have her at $ 500,000 in profits within a few years. (New Mexico courts will also order a father to pay for day care on top of child support, so she wouldn’t actually have had to take care of any children.)] Regarding the risk that Jane would lose custody of profitable children due to her heroin use, the attorney said “Only if she came into the courtroom with a needle stuck in her arm.”

Similar question: Lydia Rodarte-Quayle seems devoted to a child and also to making cash via some means other than working. She lives in Texas, a state where child support is capped at about $ 20,000 per year (only a $ 10,000 per year profit over the USDA-estimated cost of having a child in the home). But instead of taking the risk of being involved with drug trafficking, why wouldn’t she simply move to Wisconsin, California, or Massachusetts and collect her millions through legal tax-free child support? [See the “Women in Science” article for more details on real-world child support profits.]

I was talking about the show with a friend from Israel and he said “When they’re setting up the meth lab under a commercial laundry on the show why don’t any characters mention the Ayalon Institute’s ammunition factory under a commercial laundry[, built and operated in the 1940s in Israel]?”

With a business executive friend we wondered “How is that Gus can kill his henchman Victor  and then be confident of hiring a replacement? Most legal American businesses struggle to recruit reliable help.” Why is it apparently so easy to find people to work in an illegal enterprise where there is a risk of imprisonment? [see my talent management consultant posting]

What do actual criminals do to launder illicitly earned cash? Walter and his wife have to run a car wash to launder a few million dollars. But don’t major drug operations make more money than that? Could they not just drive a lot of cash across the border and deposit in a bank in a countries where not as many questions are asked? What do real-world drug lords do with U.S.-generated cash? [I did a quick Google search and found this CBS News article about HSBC helped to launder billions (separately, the daughter of the top HSBC exec became a child support profiteer, working her 6-year-old daughter for about $ 600,000 per year (NY Daily News)). But the article doesn’t say how it actually works. Do customers just back up a minivan full of cash to the bank’s loading dock?]

And why didn’t Walter move himself and his family across the border after he’d made $ 20 million or whatever but before he’d been caught? He was able to get $ 11 million in cash into each 55-gallon oil drum. Couldn’t he have smuggled a couple of those across the border? At that point he and his family become tourists in one or more foreign countries. U.S. law enforcement might look for Americans spending beyond their legally declared incomes here in the U.S. but would the police in Germany investigate an American tourist who was paying for hotel rooms, groceries, and car rental in cash? How about the police in Argentina or Brazil?

Is making pure meth truly challenging? If the drug cartels that make a lot of meth are big and well-organized, as the media and government tell us that they are, why can’t they do as good a job as other Mexican manufacturing enterprises? Aren’t there Mexican pharma firms making drugs at least as complex as meth and to international standards of purity? If so, why couldn’t people who had worked in legal pharma in Mexico set up a factory making meth as good as what Walter and Jesse were making?

Why are these criminals always chatting on their phones, wired and mobile? Wouldn’t they be worried about wiretaps? At least take the trouble to speak in codes?

Finally, could it be that Breaking Bad will discourage young Americans and Mexicans from choosing crime as a career? None of the criminals on the show seem to be able to hold onto their savings or lives in the long run. Aside from missing out on a lot of excitement and a few spending sprees they all would have better off working at Walmart.

[And yes I do recognize that the show is fictional and some of the above is likely just to make it more dramatic. An expat family living in a resort hotel in San Carlos de Bariloche and periodically dipping into their cash barrel to pay for hot chocolate wouldn’t make for must-see TV.]

Philip Greenspun’s Weblog

SMB AM Meeting Recap: $BABA

In this short video, Steve discusses a stock from this morning’s AM Meeting. Every morning he reviews the market and analyzes the stocks that are in play and likely to have second-day moves.

Steve discusses the potential trading setups in $ BABA.

Steven Spencer is the co-founder of SMB Capital and SMB University which provides trading education in stocks, options, forex and futures. He has traded professionally for 18 years. His email address is: sspencer@smbcap.com.

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SMB Capital – Trading Education

All Death Crosses Are Not the Same

Written By: DragonFly Capital

The Death Cross in the Russell 2000 seems to be all that anyone talking about. Mostly because it sounds cool, I guess. So are you sick of it yet? Death Crosses as a trading signal are not very interesting. They lag the price action and often you will have already seen the bottom before the Death Cross occurs. But as a long term indicator they can carry some value, if you know what to look for. You see all Death Crosses are not created equal.

The Death Cross is defined as when the 50 day Simple Moving Average crosses down through the 200 day moving average. It seems simple enough to interpret. If the shorter moving average is falling through the longer moving average the price is falling and the the short term momentum is to the downside. Plenty have discussed the statistics of how the market does 3, 6 or 12 months after one so I wont repeat that here (spoiler: it is higher). But what happens in 3, 6 or 12 months without looking at what happens in between is ludicrous for a swing or position trader. Even a position trader may not be able to stomach the short term pullback, and I am sure those talking statistics are not holding stop losses that allow for a 25% decline along the way. So what can you do? Lets look at the last 4 Death Crosses in the Russell 2000 ETF, IWM, a bit more closely to see if there are some clues.

death cross 1

The chart above has the last 4 Death Crosses marked, as well as the one happening now. You can see that in all 4 cases the market had fallen by at least 7% and as much as 20% BEFORE the Death Cross. this reinforces the point that a Death cross is a lagging signal. But also in in 3 of the 4 the IWM headed lower lower by over 10%, following the Death Cross, before a Golden Cross changed the signal. The 4th time, in 2010, the move following the Death Cross was muted. What is the difference?

death cross 2

The one major difference in the 2010 Death Cross was the angle when the two moving averages crossed. The angle was very steep in 2007, 2008 and 2011. But look at it in 2010. They are both nearly flat. This makes sense if you think about what would make one moving average change direction sharply, creating a bigger angle. A burst of momentum to the downside or start of a trend lower after a long flat or rising period would do it. The cross in 2010 happened in a slow move lower after a slow rise, a glancing cross. And the glancing blow did little harm. This is important because it is exactly how the current Death Cross has happened. A near glancing cut lower by the 50 day SMA. If it reverses this week many will miss that is was a cross when looking at this chart in the future. This current Death Cross does not seem to be a big signal of a major move lower. There is no strong momentum to the downside. The IWM has been moving sideways for 11 months. That is not to say a major move will not happen. But I would not be taking off my IWM related positions because of this signal.

Dragonfly Capital Views Anniversary Celebration

Dragonfly Capital Views Anniversary Celebration

For a limited time the Opportunity to join the Dragonfly Capital Views Premium Membership on an Annual basis is available for only $ 618. And every new Annual or converted subscription gets a free copy of my book.

This is nearly 20% off of the standard annual subscription price and over 40% off of a rolling monthly membership! Plus you get my book. Don’t miss this limited opportunity! Sign up here.

The post All Death Crosses Are Not the Same appeared first on Dragonfly Capital.

Dragonfly Capital

Decision Time for Netflix NFLX at Key Price Level

Netflix (NFLX) shares face an important turning point at a key support (pivot) level.

Let’s plot this level – see why it’s important – and design a trading strategy around it.

Focus on the rising 20 week EMA (price so far reversed up off this level):

The rising 20 week EMA rests at the $ 440 per share level was was (so far) this week’s reversal low.

Notice the yellow highlights on the chart where price touched, then reversed, off rising moving averages.

We’ll simply be expecting another bounce-up off this level.

We can’t assume this will happen, and thus we must plan a bearish “breakdown” contingency pathway which will trigger should shares fall sharply under the current $ 440 key pivot level.

If shares move firmly under $ 440, the weekly chart suggests a downside target play toward the $ 400 per share confluence.

The Daily Chart shows a breakdown under the 20 and 50 EMA which is bearish, but do note the “Midpoint” or middle point of the sideways trading range.

The Midpoint or price pivot is the $ 445 per share level – again the level from which price may develop a bounce/rally up from here

Otherwise, the Daily Chart suggests a bearish pathway (breakdown) that may also trigger under $ 440.  This time, the target is the $ 415 price and 200 day SMA confluence (not quite as bearish as the weekly target near $ 400).

Finally, we see a “Final Fibonacci” Level on the intraday chart:

Focus your attention on the 61.8% Fibonacci Retracement (highlighted) as drawn.

This simply overlaps the rising 20 week EMA and Midpoint on the Daily Chart.  The 61.8% level officially intersects $ 442.00 per share.

Remember, in trading, we’re not looking for precise “to the penny” pivots, but rather overlapping indications at a very similar level – a confluence.

For now, that confluence exists – and thus a pivot point (bull above; bear beneath) – has developed at the $ 440 to $ 445 level in Netflix (NFLX) and should be respected as price moves away from this key level.

Afraid to Trade Premium Content and Membership

Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog