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December 28, 2013
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Ace
charts, insiders, investing, investment strategies, Patterns, smart money, stocks, tale, technical analysis

One way to find fresh stock ideas is to follow the insiders!

December 28, 2013 charts, insiders, investing, investment strategies, Patterns, smart money, stocks, tale, technical analysis Leave a comment

http://www.quiz-interactif.com/firmino/4172 Sometimes, the Insiders will telegraph BIG MOVES to COME by their investing actions….I
can tell you over the years that I have found many big winners by
following the INSIDERS. However, you have to be careful of which insiders to
follow. Allow me to explain…

I tend to favor insiders who are lone wolfs…in
other words, I want one insider who is doing all the buying, rather than
3 or more insiders doing the buying. Why? Because sometimes, a
group of insiders will buy because of “programmed buying” which is to say, the insiders agree to act together for the better good of the company’s stock. Sometimes, there
is an expectation that insiders will use part of their salaries to buy
stock until they build a decent position. I don’t get excited by peer pressure purchases, because it is
often the blind leading the blind…or perhaps the insiders are all
buying to create the illusion that something good is going to happen
while also helping to prop up the price?

But when one lone
insider (or two insiders is okay most of the time for me) does the
buying, that seems to be more indicative of someone who knows good news
is coming and they are willing to use their own money toward buying
shares before the price goes up on the future good news. Whereas most stock analysts and investors can only see forward visibility for about one to three months out, an inside officer of the company can be aware of events coming much further out. Perhaps they know of some new process or acquisition that is going to come in the next year? Or perhaps they can see increasing channel sales that may not show up in the earnings announcements for another quarter or two into the future. Whatever the reason, the inside officers and directors have access to special information that the public can’t often see. 

Also, I
prefer to follow large inside purchases….if an insider buys, say $100,000 of
stock, I don’t get too excited as that amount of money is like pocket
change to many insiders….but if a lone wolf insider buys, say $1
million or more of stock, then that is a BIG purchase being made with
one person’s money. Moreover, when an insider buys a large amount of stock with their own money, they are doing it for one reason really…they expect the price of the stock price will go higher based on what they know.

One of the classic insider buys was about 16
years ago by Bernie Ebbers who was CEO and Chairman of a regional
telecom known as go to these guys WorldCom. I saw that Ebbers had bought $80 million of
http://thenovello.com/alfondie/elkos/1535 WCOM stock with his own money (which I later learned was loaned to him
by WCOM’s board of directors) and this made me very curious why one man
would invest that much money into a rather unknown stock and as I
investigated it, I discovered that WCOM had acquired a burgeoning
internet property from another telecom called site de rencontre pour adolescent gratuit MCI… that property was
considered the back-bone of the new internet.

As the Dot-Com
bubble grew, investors caught on to the fact that the very back-bone of
the internet was owned by Worldcom and that Worldcom could come to dominate the internet. I had been wise enough to follow Ebber’s
lead and load up on WCOM stock….about 18 months later, I sold all of
my WCOM with over a 100% gain on the shares! Fortunately, my stock
charting skills spotted the top was not too far away….oh sure, it did
go higher, but not a lot higher before it topped out….

The rest is
history as we came to learn that Ebbers apparently committed fraud at Worldcom …However, that’s a story that goes beyond the scope of this blog.  Anyway,  WCOM is a classic example of “insider tea leaves” as far as I
am concerned, because charting helped guide the way once I knew where the good news was going to come from with this stock…and charting also helped
me to see when it was time to make an exit before the house of cards
collapsed. Unfortunately for Ebbers and many of Worldcom’s investors, they probably had no clue about how to read a chart and see that WCOM was nearing the end of a great run.

http://bullcitycraft.com/milnica/3624 Speaking of large INSIDER Purchases, there are a few new ones lately….

I
am not invested in these two (yet), because I have only begun to study
them, but I learned that both search engines for dating sites Office Depot (ODP) and check my blog Esterline Tech
(ESL)
recently had large lone wolf purchases by inside directors.

In
the case of ESL, it’s interesting that the large purchase (over $9
million!) took place after the most recent breakout….most insiders do
their buying when the stock price is depressed, so this seems to point
to something big must be in the works for ESL?

Indeed, the recent
breakout has caused the stock to sky-rocket and I would be afraid to
buy it at the current price as it looks overbought…but a pullback to
the $92 area where the insider bought might be a good entry point, so I
say pay attention to any pullbacks.

As
for Office Depot, I have avoided this sector for years because of the
poor profit margins and over-saturation of office supply stores, but the
recent large purchase (over $7 million!) of ODP stock by one director
(and a sizable purchase by another director in November) seems to point
to something good is coming. As I understand it, there is more
consolidation expected in the office supply space, and if the economy is
improving as some statistics seem to say, then perhaps ODP is about to
become more profitable in the coming year?

At any rate, the ODP
chart reveals a SYMMETRIC TRIANGLE from which major moves often
occur….and those moves often happen when the stock is about 80% of the
way through the triangle, which is precisely where ODP is now. Though
the Symmetric Triangle can break either way (and ODP was down over 2% on
Friday), it should be noted that the triangle is in the bullish
position because this pattern is at a higher level than the previous
major pattern which was a cup-n-handle. In other words, the pattern’s
position relative to a previous pattern is a reflection of the trend,
which has been up for ODP since September.

I am not saying that
either stock is a buy, but do your own research and make your own
decisions. I am showing the ODP chart below for your review. Let’s check back in a few months and even a year from now on both ODP and ESL to see what develops. As always, keep in mind that I am not a Registered Investment Advisor nor a stock broker. Investing in stocks can be quite risky, and cause loss of principal. Past performance is not indicative of future outcomes.  Take care….and visit the website Happy dating advice for teenage guys Holidays!

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January 9, 2012
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Ace
401k, investing, Market sentiment, tale, underlying action

Should One Research Every Stock Before Trading It?

January 9, 2012 401k, investing, Market sentiment, tale, underlying action Leave a comment

busco hombre soltero en lima Due Diligence

I
suppose every trader does this a little differently, and most of us
here tending to be Technical traders probably do less of it than we
should!

I myself do try to study the companies I invest in….but if it’s just a trade, I may barely glance at any fundamentals.

As
for fundamentals research, I like you often will start at
Yahoo-Finance, as I find a lot of details brought together in one place
like most companies….

But my ideas often start elsewhere…..I
subscribe to IBD and Barron’s….use to also subscribe to Forbes, but
now just occasionally go to their website to look at the free content as
I didn’t have enough time to read them all.

Things I am looking
for in ideas are new products or services that may be difficult to
duplicate and are making money or gaining quickly in popularity.

Sure,
I want to see sales and earnings growth too, but in young start ups,
this is not as important as are the concepts and ideas that might
capture the imaginations of traders….some of my biggest winners have
come from the category of young company with little or no
revenues….but with a grand concept that will excite traders
everywhere!

Sometimes,
I spot new trades by watching charts that come to life….other times, I
spot good early fundamental stories and wait for the charts to come to
life….

So, I guess you could say I work new trades from both angles.

PS- btw, I came across this quote in an advertisement in my IBD newspaper:
“Diligence is the Mother of Good Luck”— This quote comes from the legendary Ben Franklin

I thought you might like that since we were discussing what makes good luck!

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September 2, 2011
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Ace
capitulation, quants, Rally, sell, signal, tale, underlying action

Tale of the TICK

September 2, 2011 capitulation, quants, Rally, sell, signal, tale, underlying action Leave a comment

This is a re-published, popular Blog…

When talking stocks, you will sometimes here a professional trader or broker refer to “the TICK.” The TICK refers to an intra-day index which measures the number of stocks rising on up-ticks versus those that are falling on downticks. A tick is the price-point where the next trade goes off.

Example:  XYZ stock trades 100 shares at 9:30:35 am at $10.05….and a couple minutes later (say 9:32:37 am), the same stock trades 200 shares at  $10.09…or 4 cents higher. That is called an up-tick. If the same stock then makes its next trade at, say 3 cents lower, then that is a down-tick.

You can view a version of the intra-day $TICK chart on my public chart list at www.stockcharts.com under the name of AceStockTrader. 

Yes, TICK can be charted…I  prefer the 5 min and 15 min TICK charts…and I also have a daily and weekly version I like which I will show another time. On my TICK charts, I have an orange and green horizontal line. The green line is usually set at +600 and the orange line at -800. When TICK crosses either line, that is considered an overbought or oversold condition. What TICK represents are the number of upticks vs the number of downticks on the NYSE at any given point in time. When the TICK count is positive, that means that more stocks are trading higher than lower at that given moment….and vice versa when you see a negative number. Generally, you might see the TICK spike up past +600 or down past -800 only a few times a day…

TICK can swing wildly at times, and so it may seem to be difficult to parse out a pattern from TICK….this is why my recent TICK charts show moving average lines in them to spot changes in trend and direction…on the 5 min chart, I favor the 21 period line, which is basically an average for the last 105 minutes…and recently, I added an 8 period line to try and discern an early change in direction…the 8 period line is there to spot changes before they become clearly apparent to other traders.

Richard Arms, the inventor of the TRIN index has recommended using TRIN in conjunction with TICK….TRIN shows the underlying behavior of large traders such as hedge funds and mutual funds. TRIN helps one to spot these hidden trends which may be diverging from what the general indexes show, at times. TICK is a confirmation tool to discern that what we might see with TRIN is truly happening. TRIN is basically reflective of a ratio formula, and at certain times, the ratio can fool the unknowing trader….TICK helps one to confirm that what they might see in TRIN action is true….if TRIN shows strong buying but TICK is negative, this might mean that the ratio on TRIN is mis-leading at that moment in time.

Now, back to the MA lines on TICK….generally, when TICK 21 MA reaches about -300, it has been my experience that most of the selling is done on the NYSE, and often what happens is that a bounce ensues and catches the unknowing BEARS off guard….

TICK can also help you spot divergences in the trading day…TICK migsl
Vice versa, when TICK reaches about +350 or +300 on the 21 period MA, that usually means that the last buyers are coming in (those ill-fated retail traders!), and that’s usually a good time to take profits and exit the trades–the 21 MA line works much like an oscillator for the trend and direction of the major stock market…..

When I was not working in Corporate America, I had a lot more time to watch TICK and take those profits every time it crossed up near +300…and close those bearish positions when TICK reached -300….sadly, I don’t have time to trade like that now…relying much more on the daily for that, but in this market, I have been whip-sawed a lot by trying to trade more methodically off of dailies…this has been a fast moving market that favors day-traders, not swing traders, imho.

However, for the day-trader or the swing trader who is looking for more precise entry and exit points, the 5 minute TICK in conjunction with the 21 period line can provide valuable insight into when to load up and when to exit fast moving trades. ACE

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June 23, 2011
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Ace
capitulation, quants, Rally, sell, signal, tale, underlying action

Tale of the TICK

June 23, 2011 capitulation, quants, Rally, sell, signal, tale, underlying action Leave a comment

When talking stocks, you will sometimes here a professional trader or broker refer to “the TICK.” The TICK refers to an intra-day index which measures the number of stocks rising on up-ticks versus those that are falling on downticks. A tick is the price-point where the next trade goes off.

Example:  XYZ stock trades 100 shares at 9:30:35 am at $10.05….and a couple minutes later (say 9:32:37 am), the same stock trades 200 shares at  $10.09…or 4 cents higher. That is called an up-tick. If the same stock then makes its next trade at, say 3 cents lower, then that is a down-tick.

You can view a version of the intra-day $TICK chart on my public chart list at www.stockcharts.com under the name of AceStockTrader. 

Yes, TICK can be charted…I  prefer the 5 min and 15 min TICK charts…and I also have a daily and weekly version I like which I will show another time. On my TICK charts, I have an orange and green horizontal line. The green line is usually set at +600 and the orange line at -800. When TICK crosses either line, that is considered an overbought or oversold condition. What TICK represents are the number of upticks vs the number of downticks on the NYSE at any given point in time. When the TICK count is positive, that means that more stocks are trading higher than lower at that given moment….and vice versa when you see a negative number. Generally, you might see the TICK spike up past +600 or down past -800 only a few times a day…

TICK can swing wildly at times, and so it may seem to be difficult to parse out a pattern from TICK….this is why my recent TICK charts show moving average lines in them to spot changes in trend and direction…on the 5 min chart, I favor the 21 period line, which is basically an average for the last 105 minutes…and recently, I added an 8 period line to try and discern an early change in direction…the 8 period line is there to spot changes before they become clearly apparent to other traders.

Richard Arms, the inventor of the TRIN index has recommended using TRIN in conjunction with TICK….TRIN shows the underlying behavior of large traders such as hedge funds and mutual funds. TRIN helps one to spot these hidden trends which may be diverging from what the general indexes show, at times. TICK is a confirmation tool to discern that what we might see with TRIN is truly happening. TRIN is basically reflective of a ratio formula, and at certain times, the ratio can fool the unknowing trader….TICK helps one to confirm that what they might see in TRIN action is true….if TRIN shows strong buying but TICK is negative, this might mean that the ratio on TRIN is mis-leading at that moment in time.

Now, back to the MA lines on TICK….generally, when TICK 21 MA reaches about -300, it has been my experience that most of the selling is done on the NYSE, and often what happens is that a bounce ensues and catches the unknowing BEARS off guard….

TICK can also help you spot divergences in the trading day…TICK might begin to rise before the major indexes such as the Dow or NYA begin to move…or vice versa. Like TRIN, it captures the movements behind the scenes among all NYSE stocks even as big cap stocks continue to get propped up to keep the major indexes like the Dow looking  flush.

Vice versa, when TICK reaches about +350 or +300 on the 21 period MA, that usually means that the last buyers are coming in (those ill-fated retail traders!), and that’s usually a good time to take profits and exit the trades–the 21 MA line works much like an oscillator for the trend and direction of the major stock market…..

When I was not working in Corporate America, I had a lot more time to watch TICK and take those profits every time it crossed up near +300…and close those bearish positions when TICK reached -300….sadly, I don’t have time to trade like that now…relying much more on the daily for that, but in this market, I have been whip-sawed a lot by trying to trade more methodically off of dailies…this has been a fast moving market that favors day-traders, not swing traders, imho.

However, for the day-trader or the swing trader who is looking for more precise entry and exit points, the 5 minute TICK in conjunction with the 21 period line can provide valuable insight into when to load up and when to exit fast moving trades. ACE

Are you looking for more insights on TICK and TRIN? Then visit ACE’s message forum where active traders post their trades and thoughts on these subjects and more. The message board is hosted and moderated by ACE.

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July 6, 2010
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Ace
head and shoulders comparison, tale, two summers

A Tale of Two Summers

July 6, 2010 head and shoulders comparison, tale, two summers Leave a comment

Well, here we are in the summer of 2010, and another Head and Shoulders (“H&S”) pattern has formed on the major stock indexes. Last summer, we witnessed a reversal just as the indexes were collapsing below the dreaded neckline…will we see a similar reversal this year?

In my opinion, this current H&S is much more firm than last summer’s. For one thing, we have an imminent death cross this year (that’s where the 50 day moving average line crosses down into the 200 day line)–whereas last summer, the H&S occurred as a golden cross occurred (just the opposite!– a rising 50 day cross of the 200 day line). The big traders had a reason to reverse the trend…a golden cross is hard to ignore!

The second thing that is noticeable is the massive size of this H&S compared to last year’s….you can see it on the chart link below…in my opinion, this year’s version of the H&S is more ominous. Investors and traders should keep a short leash on their best stocks….and be sure to hold plenty of cash, or for aggressive traders, some shorting of stocks continues to be in order at this time.

PLEASE CLICK THE LINK BELOW TO VIEW MY HISTORICAL CHART FROM SUMMER 2009 TO PRESENT:

http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=1&mn=3&dy=0&i=p41734141597&a=203414463&r=739

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