There are a wide variety of active risk management strategies. None of them are fool-proof.
The one that we advocate — stop-limit loss orders — may have adverse tax consequences; the stop may also fail to execute in a rapidly declining market.
Options¬†and futures¬†investors cheer the “out-of-the-money” puts. This has the benefit of an insurance policy, though [...] [...more]
Wells Fargo, Bank of America and Citigroup are all down¬†about¬†17% -¬†21%¬†in 2011.¬†Making matters worse, Moody’s¬†has placed these companies under a ratings review.
In fact, the technical picture¬†for Financial ETFs is¬†becoming increasingly¬†bearish. While¬†the Financial Select Sector SPDR (XLF) and iShares DJ¬†Regional Banks (IAT)¬†are only down¬†7%-8%¬†YTD, they’ve fallen 2x as far from 2011 highs and¬†share prices have fallen [...] [...more]
There are scores of reasons that the S&P 500¬†”shouldn’t”¬†go much higher in the near-term. Here are¬†several of those reasons,¬†in no particular order: (1) Psychological resistance for the S&P 500 at the 1300 level, (2) Fibonacci retracement resistance at approx 1295, (3)¬†Extreme bullish sentiment of investment advisers, (4) Dangerously high bullishness in the AAII Survey, (5) [...] [...more]
Economists have been impressed with the comsumer spending on both Black Friday and Cyber Monday.¬†Similarly, technical anlaysts have been intrigued by the¬†S&P 500’s ability to hold the fort at the 1175 mark.¬†¬†
Will¬†the retail momentum translate into bigger profits¬†for¬†Stock ETFs? Can the fast start to December be the catalyst to send Sector ETFs to brand new [...] [...more]
According to Bloomberg, the S&P 500 is trading at 14.2x forecasted earnings. If you like Forward P/E ratios, that’s cheaper than at any time since 1990. (Note: Bloomberg actually excludes¬†the post-Lehman bankruptcy¬†when discussing¬†how inexpensive stocks are.)
On the flip side, the S&P 500¬†has an inflation-adjusted¬†Shiller’s P/E of 22.1. This is an inflation-adjusted¬†price-to-earnings ratio that compares current [...] [...more]
It’s not like the pundits haven’t been talking about it. The S&P 1225-1230ish level represents harsh resistance for the stock market.
There are scores of reasons. Yet one author puts forward a few more, including¬†the ghost of the Lehman bankruptcy in October 2008 as well as Fibonacci¬†retracement; the latter suggests that¬†S&P 500 1228 may be a [...] [...more]