Author Archives: Trade Advantage

this is not really going anywhere..

Posted on by

this is not really going anywhere..one way or other at the moment…maybe lower into lon ..then some little rally later…quite the monotony they can create and then make the better moves when least expected….but don’t really know at the moment but liitle push higher here poss

this has only gone 1 tick below where we …

Posted on by

this has only gone 1 tick below where we recommended….risk is a difficult thing…esp when trading and takes time to develop for each individual…I can only give insights and rec…i do not know what your own risk tolerance is…but .this is trading ..not low risk long term investing…so obv one must realize that more risk must be taken on to achieve positive results

now may see lower..and have to wait …

Posted on by

now may see lower..and have to wait ..alhhtough a fake here for higher very poss remember the safest way to go after 2 or 3 is a be and out….that is up to you…all risk is…but fakes like this are common and it could take off here…hence why I always watch and see..esp if already have profit on the trade……( and can add if already reduced etc)

Financial headlines over the wkend……..

Posted on by

Financial headlines over the wkend and this am such as ” Yellen’s speech at Jackson Hole set to dominate mood on wall St”, and ” Dow futures trend water as buyers won’t jump in until Yellen speaks”, tell us the exchange is still mainly utilizing the Fed as they did last week to shape investor thinking

In Barron’s this weekend, A publication …….

Posted on by

In Barron’s this weekend, A publication of the Dow Jones…worthy of the most advanced propaganda….said..” four years ago, Facebook was too pricy at 23 a share…..today,at 124, it could go higher’..another words, a buy recommendation on FB at 124 for an anticipated 153 in a year…One of the only retail outlets in the world(the exchange) where one is readily induced into buying high and selling low

CVX Gaps and Volume Trading

Posted on by

CVX Volume Trading

A – Notice the gap opening down and subsequent heavy VOL after the O/N “surprise” China News. This enabled insiders to accumulate large amounts of CVX Stock and cover their short positions from much higher prices (125+). This triggered a buy signal in the 72-75 range for long term gains.

B – Notice the gap opening down here and the spiked daily bar down on very high VOL, on bad news (o/n). After selling short and covering their purchases near the 100 level in November, insiders re-accumulated and covered their short positions in the 75 range for another long term buy signal. After further gap accumulation from the “Brexit” recently – CVX is still a hold for what I believe higher prices yet.

The Dow Divisor – What is it? -How Is it used in Investor Psychology

Posted on by

2012a194649c942af4a1e208cc64acbc

I feel there are very few people, including investors and traders, who know just what the Dow divisor is and exactly what its implications are in regard to investor psychology.

Well, what is it? The Dow divisor is a calculation used to arrive at the Dow Jones Industrial Average. It is obtained by the sum of the price of the thirty Dow components, and then dividing the figure by the divisor. The divisor is a figure that has changed dramatically over the years to reflect stock splits, spin-offs and the various changes of the Dow components over the years.

The current Dow divisor as of August, 2015, is 0.14602128057775. Therefore, if you add up the thirty Dow stocks and divide by the Dow divisor you will arrive at the Dow average. About 18552 at the end of the day, August 19,2016. In August of 1976 the Dow divisor was 1.504. You may say, so what? But think of this. The Dow is still widely watched and used as a gauge by investors all over the world. Television programs, such as those on CNBC, and the financial media, will loudly and dramatically broadcast the Dow average all day long, especially when it is way up or way down. But here’s the thing:

You will often hear people, investors, say you can’t compare the market of then, with today’s market. It used to move in the 1970’s 7-15 points and that was considered a decent move. Today it regularly moves 100-200 points. However, if GE or an equivalent Dow stock moved up or down three points in 1976, that is absolutely no different than if GE moves up or down the same three points today. To someone holding or trading this stock, the profit or loss would be exactly the same. And trust me, stocks in 1976 moved up and down just as much as they do today.

But here’s the rub, and how the exchange and the corroborating media outlets play with investors heads because of the Dow divisor. In 1976, if a Dow component moved one point, the Dow average would move .66 of one point. 1 divided by 1.504 ( the 1976 Dow divisor), and you get .66. Therefore, if all thirty Dow stocks moved up one point in 1976, the Dow Average would be up 19.95 points! It moves that much in minutes today back and forth. Today, if all thirty Dow stocks move up one point, the Dow average goes up 200 points!! The exact same movement in Dow stocks, creates a difference of 180 points in the Dow average 40 years later.

Along with the media control they have, the exchange can utilize the Dow average in order to condition investor psychology, whether negative or positive, to help in accomplishing their goals. It would only take a drop of 150 Dow component points,( 5 points per Dow stock), to cause a 1000 point decline in the Dow average! This will be loudly proclaimed as Armageddon on the news outlets and will have an influence on investor psyches. The Dow average is basically used as a psychological hammer or euphoric drug by the exchange, which helps them achieve the buying and selling for their accounts.

This is something to ponder as we head into the future with these extremely high averages, wherein 500-1000 point moves will be more commonplace, and the divisor will most likely shrink even more, enabling the exchange to sweep people either out of the market or draw them in like a stampede, thus more easily attaining the desired goals of the insiders.

So if done for the week…and we may be….

Posted on by

So if done for the week…and we may be….it was a good week. No trades on mon….but week ended up …using the min of 3 contracts per trade and the three posted reductions…..54.5 ES pts on 7 trades for the week…for those with very low risk profile or those with small accts it was a pretty good week….about 2775 profit with maybe 100 in commissions. Those doing larger contract size and have larger accts and have larger risk appetite, obv did quite well. And there were no losses this week if trades done as posted.( did not panic out or put in very tight stops) in other words…dont overtrade…dont panic….follow the plan ..the method..and we should be fine