Himalay H. posted an article on Stock Market Analysis - Feb 2, 2012, 1:00 pm
by Michael Schmidt Asset class returns are usually identified by their long-term projections, which are based on a combination of historical returns and future expectations. The historical data is usually presented in its final form of an annualized return and, while it would be helpful, is not alw...
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Himalay H. posted an article on Stock Market Analysis - Feb 1, 2012, 12:36 pm
The Zigzag indicator is not really an indicator per se. Instead, it defines price swings that meet a minimum percentage change. Chartists can use this indicator to identify significant price swings and filter out insignificant price swings. The definition of significant is, of course, subjective. ...
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Himalay H. posted an article on Stock Market Analysis - Jan 30, 2012, 3:27 pm
This ratio indicates how profitable a company is by comparing its net income to its average shareholders' equity. The return on equity ratio (ROE) measures how much the shareholders earned for their investment in the company. The higher the ratio percentage, the more efficient management is in util...
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Himalay H. posted an article on Stock Market Analysis - Jan 30, 2012, 6:21 am
This ratio, which is expressed as a percentage, compares a company's operating cash flow to its net sales or revenues, which gives investors an idea of the company's ability to turn sales into cash. It would be worrisome to see a company's sales grow without a parallel growth in operating cash flo...
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Himalay H. posted an article on Stock Market Analysis - Jan 27, 2012, 3:21 pm
This ratio indicates how profitable a company is relative to its total assets. The return on assets (ROA) ratio illustrates how well management is employing the company's total assets to make a profit. The higher the return, the more efficient management is in utilizing its asset base. The ROA rati...
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Himalay H. posted an article on Stock Market Analysis - Jan 25, 2012, 2:46 am
The return on capital employed (ROCE) ratio, expressed as a percentage, complements the return on equity (ROE) ratio by adding a company's debt liabilities, or funded debt, to equity to reflect a company's total "capital employed". This measure narrows the focus to gain a better understanding of a...
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Himalay H. posted an article on Stock Market Analysis - Jan 22, 2012, 3:17 pm
This ratio is a measurement of a company's tax rate, which is calculated by comparing its income tax expense to its pretax income. This amount will often differ from the company's stated jurisdictional rate due to many accounting factors, including foreign exchange provisions. This effective tax rat...
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Himalay H. posted an article on Stock Market Analysis - Jan 20, 2012, 5:57 am
Expressed as an indicator (days) of management performance efficiency, the operating cycle is a "twin" of the cash conversion cycle. While the parts are the same - receivables, inventory and payables - in the operating cycle, they are analyzed from the perspective of how well the company is manag...
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Himalay H. posted an article on Stock Market Analysis - Jan 17, 2012, 3:06 pm
This liquidity metric expresses the length of time (in days) that a company uses to sell inventory, collect receivables and pay its accounts payable. The cash conversion cycle (CCC) measures the number of days a company's cash is tied up in the the production and sales process of its operations an...
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Himalay H. posted an article on Stock Market Analysis - Jan 17, 2012, 6:40 am
This ratio measures the ability of the company's operating cash flow to meet its obligations - including its liabilities or ongoing concern costs. The operating cash flow is simply the amount of cash generated by the company from its main operations, which are used to keep the business funded. The...
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Himalay H. posted an article on Stock Market Analysis - Jan 15, 2012, 5:53 am
As a gauge of personnel productivity, this indicator simply measures the amount of dollar sales, or revenue, generated per employee. The higher the dollar figure the better. Here again, labor-intensive businesses (ex. mass market retailers) will be less productive in this metric than a high-tech, hi...
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Himalay H. posted an article on Stock Market Analysis - Jan 12, 2012, 3:13 pm
In the income statement, there are four levels of profit or profit margins - gross profit, operating profit, pretax profit and net profit. The term "margin" can apply to the absolute number for a given profit level and/or the number as a percentage of net sales/revenues. Profit margin analysis uses...
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Himalay H. posted an article on Stock Market Analysis - Jan 10, 2012, 3:08 am
This ratio is a rough measure of the productivity of a company's fixed assets (property, plant and equipment or PP&E) with respect to generating sales. For most companies, their investment in fixed assets represents the single largest component of their total assets. This annual turnover ratio is d...
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Himalay H. posted an article on Stock Market Analysis - Jan 7, 2012, 2:52 pm
The cash ratio is an indicator of a company's liquidity that further refines both the current ratio and the quick ratio by measuring the amount of cash, cash equivalents or invested funds there are in current assets to cover current liabilities. Formula: Components: As of December 31, 2...
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Himalay H. posted an article on Stock Market Analysis - Jan 7, 2012, 6:44 am
This ratio identifies the percentage of earnings (net income) per common share allocated to paying cash dividends to shareholders. The dividend payout ratio is an indicator of how well earnings support the dividend payment. Here's how dividends "start" and "end." During a fiscal year quarter, a c...
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Himalay H. posted an article on Stock Market Analysis - Jan 5, 2012, 6:28 am
The free cash flow/operating cash flow ratio measures the relationship between free cash flow and operating cash flow. Free cash flow is most often defined as operating cash flow minus capital expenditures, which, in analytical terms, are considered to be an essential outflow of funds to maintain a...
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Himalay H. posted an article on Stock Market Analysis - Jan 2, 2012, 2:44 pm
The quick ratio - aka the quick assets ratio or the acid-test ratio - is a liquidity indicator that further refines the current ratio by measuring the amount of the most liquid current assets there are to cover current liabilities. The quick ratio is more conservative than the current ratio becau...
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Himalay H. posted an article on Stock Market Analysis - Oct 30, 2011, 6:25 am
Eight Majors Unlike the stock market where investors have thousands of stocks to choose from, in the currency market, you only need to follow eight major economies and then determine which will provide the best undervalued or overvalued opportunities. These following eight countries make up the majo...
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Himalay H. posted an article on Stock Market Analysis - Oct 28, 2011, 4:19 am
Short-term trading can be very lucrative, but also risky. It can last for as little as a few minutes to as long as several days. To succeed at this strategy, traders must understand the risks and the rewards of each trade. They must not only know how to spot good short-term opportunities, but also m...
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Himalay H. posted an article on Stock Market Analysis - Oct 25, 2011, 4:15 am
The concept of leverage is used by both investors and companies. Investors use leverage to significantly increase the returns that can be provided on an investment. They lever their investments by using various instruments that include options, futures and margin accounts. Companies can use leverage...
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Himalay H. posted an article on Stock Market Analysis - Oct 23, 2011, 3:36 am
... so many people are attracted to trading forex compared to other financial instruments is ... invest in something. In the case of forex, that money is usually borrowed from a broker. Forex trading does offer high leverage in the sense ... from their margin-based leverage. Leverage in Forex Tra...
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Himalay H. posted an article on Stock Market Analysis - Oct 20, 2011, 4:43 am
People often ask if technical analysis can be used as an effective substitute for fundamental analysis. Although there is no definitive answer whether technical analysis can be used as a whole substitution for fundamental analysis, there is little doubt that combining the strengths of both strategie...
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Himalay H. posted an article on Stock Market Analysis - Oct 17, 2011, 4:46 pm
In some fields of business, such as real estate, you'll frequently hear that the way to make money is by "using other people's money". This is true in the case of every real estate transaction that involves a mortgage; when you use a mortgage to buy a house, you are using other people's money, in th...
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Himalay H. posted an article on Stock Market Analysis - Oct 12, 2011, 4:46 pm
In the foreign exchange markets, it is common to find leverage of 100:1 or even more. However, just because the market maker or broker may offer you leverage as high as 100:1, it doesn't mean you have to use all the leverage available. In fact, if you are a savvy trader, you will only use high lever...
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Himalay H. posted an article on Stock Market Analysis - Oct 10, 2011, 4:35 am
The forex market, unlike other exchange driven markets, has a unique feature that many market makers use to entice traders to trade. They promise no exchange fees or regulatory fees, no data fees and, best of all, no commissions. To the new trader just wanting to break into the trading business, thi...
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Himalay H. posted an article on Stock Market Analysis - Oct 7, 2011, 4:32 pm
The global forex market boasts over $4 trillion in average daily trading volume, making it the largest financial market in the world. Forex's popularity entices traders of all levels, from greenhorns just learning about the financial markets to well-seasoned professionals. Because it is so easy to t...
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Himalay H. posted an article on Stock Market Analysis - Oct 5, 2011, 4:29 am
For all of its numbers, charts and ratios, trading is more art than science. Just as in artistic endeavors, there is talent involved, but talent will only take you so far. The best traders hone their skills through practice and discipline. They perform self analysis to see what drives their trades a...
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Himalay H. posted an article on Stock Market Analysis - Oct 2, 2011, 4:16 pm
Averaging Down Traders often stumble across averaging down. It is not something they intended to do when they began trading, but most traders have ended up doing it. There are several problems with averaging down. The main problem is that a losing position is being held - not only potentially sacri...
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Himalay H. posted an article on Stock Market Analysis - Sep 29, 2011, 4:29 pm
The Force Index is a price-volume oscillator designed to measure the balance of power behind a particular move. The Force Index rises when the close is above the prior close and falls when the close is lower. This rise or fall is enhanced by the extent of the move and the volume behind it. A str...
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Himalay H. posted an article on Stock Market Analysis - Sep 28, 2011, 4:06 pm
If the stock market were a mental health patient, it would have been committed by now. Major trend changes are occurring at points of wild volatility and extreme fear. I've written many times in the past about my favorite sentiment indicator - the equity only put call ratio (EOPCR)....
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Himalay H. posted an article on Stock Market Analysis - Sep 24, 2011, 4:22 pm
The TRIX oscillator is based on a triple smoothed exponential moving average. First, start with a regular 15-period EMA. Second, take the 15-period EMA of the regular EMA. This is the double smoothed EMA. Third, take the 15-period EMA of the double smoothed EMA. This is a triple smoot...
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Himalay H. posted an article on Stock Market Analysis - Sep 22, 2011, 5:11 pm
by Ken Hawkins The risk of an entire investment portfolio is always less than the sum of the risks of its individual parts. Many investors lose sight of that fact when making investment decisions. When adding an additional security to your portfolio, you might look at the risk of the additional secu...
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Himalay H. posted an article on Stock Market Analysis - Sep 19, 2011, 4:16 pm
On 8/2/2011 our mechanical Thrust/Trend Model generated a medium-term NEUTRAL signal for the S&P 500 Index just in time to avoid the market break on 8/4. (Neutral means to be market neutral -- in cash or fully hedged.) After the breakdown we believed we had entered a bear market, bu...
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Himalay H. posted an article on Stock Market Analysis - Sep 17, 2011, 5:03 pm
Why Seek Risk? The linkage between risk and reward is not always perfect or predictable, but there is a time-tested correlation between risk and reward. If investors want higher returns, they have to be willing to take on higher risk. Said differently, though, if an investor can ac...
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Himalay H. posted an article on Stock Market Analysis - Sep 14, 2011, 4:12 pm
The recent volatility is enough to make one step back, put your money aside - and reassess. In fact, this is what both institutional and individual investors have done over the past 3-weeks as money withdrawn from funds has significantly increased - even more so than at the March-2009...
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Himalay H. posted an article on Stock Market Analysis - Sep 12, 2011, 4:54 pm
Volume weighted average price (VWAP) and moving volume weighted average price (MVWAP) are trading tools that can be used by all traders. However, these tools are used most frequently by short-term traders and in algorithm based trading programs. MVWAP may be used by longer term traders, but VWAP on...
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Himalay H. posted an article on Stock Market Analysis - Sep 9, 2011, 4:49 pm
Both the Price Channel and Bollinger Bands consist of three lines, a middle line and two outer lines. These indicators produce similar lines and signals, but the lines are calculated differently. For a 20-day Price Channel, the upper line is the 20-day high and the Lower line is the 20-day low. ...
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Himalay H. posted an article on Stock Market Analysis - Sep 7, 2011, 4:45 pm
Rising Profits For example, many investors don't sell when a stock has risen 10 to 20% because they don't want to miss out on more returns if the stock shoots to the moon. This is due to their greed and the hope that the stock they picked will be a big winner. On the flip side, if the stock fel...
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Himalay H. posted an article on Stock Market Analysis - Sep 4, 2011, 4:44 pm
A Selling Climax is a high volume decline that is suddenly reversed. Candlesticks are especially helpful for identifying a selling climax. In particular, chartists should be on the look out for high volume Hammers, Bullish Engulfing patterns and Piercing Lines. Before looking for such patter...
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Himalay H. posted an article on Stock Market Analysis - Sep 2, 2011, 4:34 pm
the S&P Energy sector appears ready to resume its upward trend against the S&P Consumer Discretionary sector. In other words, Energy is expected to outperform Consumer Discretionary. As for our chart target: we could very well see the ratio trade upwards of 2.3 to 2.4 in the months ahead. F...
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Himalay H. posted an article on Stock Market Analysis - Aug 29, 2011, 4:40 pm
Both the Accumulation Distribution Line and On Balance Volume (OBV) are volume-based indicators designed to measure the balance of power between buying pressure and selling pressure. These indicators can move different ways because they are calculated differently. Let’s start with OBV, which i...
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Himalay H. posted an article on Stock Market Analysis - Aug 24, 2011, 4:37 pm
A continuous futures contract is not really a futures contract. Instead, it is several futures contracts that have been spliced together to create a long-term chart. There is often a data adjustment involved in this splicing to eliminate gaps and create a smooth price series. These gaps stem fro...
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Himalay H. posted an article on Stock Market Analysis - Aug 19, 2011, 4:23 pm
StochRSI is volatile because it is an indicator of an indicator. Most indicators are derived directly from price. StochRSI is derived directly from RSI values, which are derived from price. This means StochRSI is two steps removed from the actual price. This is also known as the second derivativ...
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Himalay H. posted an article on Stock Market Analysis - Aug 14, 2011, 4:13 pm
Invented by Marc Chaikin, the Chaikin Oscillator is an indicator of an indicator. In particular, it measures the momentum of the Accumulation Distribution Line, which is also a Chaikin indicator. The Chaikin Oscillator (3,10) shows the difference between the 3-day EMA of the Accumulation Distributio...
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Himalay H. posted an article on Stock Market Analysis - Aug 9, 2011, 3:48 pm
Traders have an expression for attempting to pick a market top or bottom - they call it trying to catch a falling knife. As the expression implies, it can be downright dangerous and is not normally recommended. But here is a method that may help lower the risk. One technique that Fisher calls ...
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Himalay H. posted an article on Stock Market Analysis - Aug 4, 2011, 3:22 pm
Most of us have wondered, at some point, whether a decline in the price of a stock we're holding is long term or a mere market hiccup. Some of us have sold our stock in such a situation, only to see it rise to new highs just days later. This is a frustrating and all too common scenario, but it can b...
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Himalay H. posted an article on Stock Market Analysis - Jul 24, 2011, 2:55 pm
Learn how to spot bearish chart patterns Double-Top A double-top is a reversal pattern that occurs when prices are in an uptrend. Sometimes called an “M formation” because of its shape, the double-top is one of the most common chart patterns. Because they seem to be so easy to identify...
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Himalay H. posted an article on Stock Market Analysis - May 20, 2011, 8:22 am
Dow Theory is based on the writings of Charles Dow, creator of the Dow Jones Industrial Average. As editor of the Wall Street Journal in the late 19th century, Dow wrote many articles detailing his thoughts on market analysis. He never wrote a book, but William Hamilton and Robert Rhea assembled...
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Himalay H. posted an article on Stock Market Analysis - May 14, 2011, 8:09 am
Bearish Engulfing patterns and Dark Cloud patterns are bearish candlestick reversals that form with two candlesticks. The first candlestick of a bearish engulfing is white with a large or small body. The open and close form the candlestick body. The second candlestick is black and totally engulf...
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Himalay H. posted an article on Stock Market Analysis - Jan 30, 2010, 4:16 pm
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