Understanding Initial Public Offerings
An initial public offering (IPO) refers to the first time a company publicly sells shares of its stock on the open market. It is also known as “going public.”
The proceeds from the sale of stock shares in an initial public offering provide the issuing company with capital. For this reason, many start-up companies issue IPOs because they’re seeking a source of capital to fund growth.
IPOs are introduced to the market by an underwriting investment bank, which aids the issuing company by soliciting potential investors. In addition, the underwriter helps the issuing company to settle on the price at which the stock should be offered to investors.
IPOs represent the first time an issuing company will financially benefit from the public sale of its stock. Following the IPO, shares trade between buyers and sellers on the open market, whereby the underlying company receives no compensation.
For a company, the capital earned from selling its shares to the public act can act as a major boost the the business’ growth, making the idea of an initial public offering attractive. For investors, IPOs are a significantly higher risk as opposed to a currently traded stock. A lack of historical data combined with a usually limited history behind the company can make purchasing recently issued shares more risky.
the Stock Market Decade
It has been a 10-year Bear Market. We’re now coming to the Top of that channel. Watch how the Institutional Investors react to prices around that Top blue line. The $XII represents the top holdings at Institutions. This gives a better view of the Market than just using an Index.
Good Trading ARTS
Here is an example showing the ease of use of the ARTS Trading System. Even just using the end-of-day Daily Chart .. just Buy when she says Buy and Sell when she says Sell:
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Fed Easing Programs
The end of the Fed’s Operation Twist is coming soon . . this June.
As seen in the chart below, each time the previous Fed Easing programs have come to an end .. the result has been a pull-back/Drop in the Stock Market.
Something to remember as we approach June.
Fed Easing Programs
DOW Gold Rush
The price of the DOW is at a twenty year LOW!
Well, in terms of ounces of Gold.
We actually hit these levels twice before over the past three years (look at the green-line level).
When priced in Gold, the DOW has been Trading at the same levels as 1990 to 1991.
So in looking back at 1990/1991, you can see what happened to the ratio afterwards.
The DOW rose and Gold went Sideways/Down … thereby increasing the ratio for the following nine- or ten- years!
So . . looking forward, stock prices should rise and/or Gold prices should fall.
Invest accordingly.
the DOW versus Gold
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If It Looks Like a Top
it may be a good time to Bank Big Profits from my Stock Picks in my previous post of Dec-15. Most of those have risen dramatically from my call to Buy them .. and my Member Charts are really showing the Market to be Over-Bought and ready for a Drop. Couple that with the Economic Fundamentals being so Bearish, I think it is a good idea to take those Profits and then wait for a Drop to Buy again. Buying on Dips/Drops is always a better time to do so . . this is the way More...
Longer-Term Stock Picks
I really like these companies to Buy in your longer-term account(s) . . . they give you good promise of price appreciation as well as income through dividends. These are great companies with good probable 2012 fundamentals as well as a strong history of increasing dividends. Be sure to check out the Seasonality/Historical-Price-Analysis of each of these stocks to see when the best time of the year to Buy and Sell is. I recommend just watching them for now and when the General Stock Markets start to turn back North again, THEN start Buying these .. keep checking back here More...
What did I say
Just looking back on some of my recent posts . . . specifically from November-9th and November-8th.
November-8th I spoke of that Diamond Formation that developed . . . and that a breakout Up or Down would cause it to enter a new Channel and trend in that direction thereafter. Sure enough .. the next day (November-9th) we got a Big Break Down and have been Trending in the Down-Channel ever since. November-9th then I posted that there should be a retest of the break-out level (shown on the posted Chart). Sure enough!, Nov-11 More...
Long-Term Head and Shoulders
Using the NYSE Index to look at the action of a broad sampling of stocks, we can see a 12-year Head and Shoulders plus MegaPhone formation. A break and hold above the Green Lines would be very Bullish . . . a break and hold below the Blue line would be very Bearish. The lowest Green line forecasts a move to the highest Green line . . . the Blue line break would forecast a move to the Red line.
an Obvious Choice
The Commentary and Chart I posted about yesterday sure came to fruition quickly . . . and the winner is . . . Down. The Diamond pattern was broken to the Down-side today . . . look out for a move Up soon to retest the breakout level .. where the yellow star is in this chart:
Next Trend Indicator — a Diamond
The SPY (and S&P-500 Index) has currently completed a Diamond Pattern. Whichever way she breaks out of the focal point (yellow area), a new channel will be formed .. Up or Down.
Nice Ride!
Here are charts from the Simply 5% System . . . the same charts we posted two weeks ago that said “Bear Flags Everywhere.”
See what happened after our Bearish forecasts:
Near-Term Stock Market Trading Plan
A new Trading Plan has become apparent . . . following this should help you Profit during these turbulent times.
Trading Commentary
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After today’s probably Down Open (Monday, 9-12), I am expecting the S&P-500 to Trade between 1100 and 1145 for the next month . . then breaking out of that Range into the next Bigger Trend.
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Bear Flags Everywhere
There has been a lot of chop this week. But all the chop is producing is one big bear flag on the indices. Not much in the Simply 5% System tells us to be long, except for Gold. This is fine because it’s just as easy to make money going down as it is going up.
Murky Waters
There has been a big change in the intraday charts, but daily charts remain on a sell. There is no way to know how Hurricane Irene will impact the markets on Monday. Most of the time a pilot can not see what lies ahead in his path. He maneuvers a plane based on trusting the panel he is reading in the cockpit. When the information on the panel changes, he adjusts the direction of the plane. Even in flying on a straight navigational path, the pilot has to continually make adjustments because of variables in weather. We are no different. More...
Some Very Bearish Tones
There are some Strong Signs that are pointing to a Down Market over the next Month or more . . but it may not happen all at once.
Premium Members, continue reading this post below with Charts and more detailed Commentary.
Trading Commentary
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Shown in this Chart are two Very Strong and Popular Signs of more probable Down to come: the Bearish Golden Cross (50ma X 200ma Down) and a continuation pattern (Pennant/Triangle) that should breakout with a continuation of the early
Louise Yamada Speaks
If you are not acquainted with the name Louise Yamada, let us introduce you. Here is a brief bio:
Louise Yamada is Managing Director of Louise Yamada Technical Research Advisors (LYA) founded October 2005. Previously Louise was Managing Director and Head of Technical Research for Smith Barney (Citigroup). Louise has been a perennial leader in the Institutional Investor poll, and was the top-ranked market technician in 2001, 2002, 2003 and 2004 prior to her departure from Citigroup.
At LYA Louise has made major calls on: The onset of the relative strength decline of the Financial sector (with reports starting March More...
QQQ Option Pick
Here is the latest Trade from OptionSmart‘s Virtual Hedge Fund Alert:
Day Limit Order Open Bull Debit Call Spread BTO QQQ Oct (10/21/2011) 47 C STO QQQ Oct (10/21/2011) 50 C Debit 2.20 or less Target Credit 3.00 or more
I would wait for a turn Up in QQQ for this Trade.
Now What?
The market has gotten a bounce, but as you can see from the spreadsheet, the ETFs are saying CASH is a position. And while the 60 and 30 minute stocks are on a buy signal, they are barely on a buy. So caution is warranted until we see what Monday brings. If you use the Simply 5% System, just trade when the signal changes. Yes, it really is that simple.
American Scary
Many traders were a little unnerved this week and the regular Joe is probably freaking out this weekend. Big, but expected news this morning with the US debt downgraded. China is also flexing it’s muscle today in the news, letting the US know that enough is enough. However, if you use Simply 5%, you were not unnerved and you certainly are not freaking out. Most importantly, you are NOT losing money. We told you last weekend there was no surprise, the signals had already triggered. Here are some charts showing the Short- and Long- Signals that our More...
