UBS (UBS), a major financial and investment company with headquarters in Switzerland, announced April 1st that it will write down another $19 billion dollars in ‘sub-prime’ investment losses, yet their stock rallied sharply on this news. Why? According to a New York Times article yesterday, which was one of many sources to report this development,…
I just discovered this interesting graph from Finviz.com (under the Services section) regarding probabilities of a daily gap filling. While they don’t discuss their methods or the period observed, the main idea of the study is two points: The probability of an overnight gap being filled increases as days progress; The larger the gap, the…
–Who is Chuck LeBeau?– Chuck has appeared as a featured speaker at numerous futures seminars throughout the world and has frequently been a guest lecturer at the University of Southern California where he teaches fundamental and technical analysis to graduate students in the MBA program. He has been a paid consultant to several financial institutions…
You’ve had it happen to you. You want to buy a stock you’ve been studying for a while, and finally they announce a surprise bit of good news and the price rallies sharply higher and so you jump in, not to be left out. You have a sudden profit on your hands but suddenly, the…
I wanted to point out a quick little pattern in Apple (AAPL) on the 5-minute chart today that I found very curious. I zoomed in on the area of interest. Notice how the 5-minute bars respond virtually perfectly to the falling 50 period moving average and the rising 200 period moving average. What’s interesting to…
Why? Because the Federal Reserve meets on Tuesday to announce a new interest rate cut of up to .50 or .75 bps, which could be a major market mover up or down, and quadruple witching expiration occurs this Thursday. While options expiration normally takes place the 3rd Friday of a month, this Friday, March 21st…
Without getting too deep in explanation, let’s look at the technical picture of Gold, Oil, and the US Dollar Index on the daily charts: First, the plunging US Dollar Index: On to Light Crude Oil (one barrel): Finally, Gold Contract Prices (one ounce): Finally, let’s compare the relative performance of these markets (from 180 days…
Sears Holding (SHLD) has taken a severe punishment from investors since 2007, falling from an all-time high above $190 to a recent three-year low beneath $90. While the chart itself is educational from a trend and retracement perspective, I wanted to highlight a few points during the decline. First, there were two significant events that…
In my previous post entitled “Gambler’s Fallacy” I mentioned that you should not radically alter your position size (or trading frequency) based on the outcome of the last handful of trades. But when is it appropriate to adjust your position size? Recall that the Gambler’s Fallacy occurs based on emotions, whether positive or negative. If…
If you’ve never checked out the amount of data you can find and customize from the Federal Reserve of St. Louis website, I strongly suggest you do so. While you can find a plethora of information there, I strongly recommend the “FRED Graphs,” which allows customized views of virtually any Fed data you can reasonably…