4:20 pm : On Thursday, the stock market closed the shortened week on a high note. The major indices surged more than 2% in heavy trading, and finished near their best levels of the session. Financials led the way higher, thanks to a pair of upgrades and news that the Fed is expanding its previously announced plan to increase liquidity.

The financial sector (+6.9%) was the driving force behind this session’s strength. It got off to a strong start after Fannie Mae (FNM 34.30, +3.59) and Freddie Mac (FRE 32.58, +2.68) were upgraded to Outperform from Market Perform at Keefe, Bruyette & Woods.

Financials, and the market, got a further boost after the New York Fed announced modifications to its new Term Securities Lending Facility (TSFL). The TSFL auctions will now allow schedule 2 collateral, instead of the schedule 1 collateral previously proposed. Schedule 2 collateral will now include collateralized mortgage obligations (CMOs) and AAA rated commercial mortgage-backed securities

In other words, the Fed will be lending banks highly liquid Treasury securities in exchange for less liquid assets. Banks will now be able to use a wider range of collateral than previously announced. The first auction will take place on March 27 with an offering size of $75 billion for a term of 28 days. Up to $200 billion in loans have been authorized. This is a positive development as it temporarily relieves holders of the difficult to trade securities.

The thrifts & mortgages group (+10.3%) was a standout for the third day in a row. The group has spiked 53% from its low on Monday. Investment banks & brokerages was also a leader with a 11.2% gain. Yahoo Finance

Get a free Trend Analysis on almost any symbol - stocks, futures, forex.

Some people think that the best way to avoid disasters like eTrade is to not trade at all. If you are trading or even stocking your IRA then the big question is how do you avoid disaters?

Avoiding Disasters Video (eTrade the focus)

Well, the best way to avoid disasters like Structured Investment Vehicles (SIVs), Collateralized Debt Obligations (CDOs) is to get some information that will teach you how to avoid them. This short, four minute video trading lesson, will show you the exact rules you need to follow to avoid meltdowns in the future. It will also show you how you can even profit from disasters like e-Trade. Watch it as my guest. No registration required.

I have to admit, I love this company’s product, but I hate the market action of their stock.

The company that is being discussed today is Starbucks. I am sure that if you drink coffee you’ve had one of their tasty coffee brews.

How can I love their Coffee Frappuccino Grande and hate their stock?

Well it all started in January of this year when one of our major Triangle indicators flashed a major trend change. This indicator is one we watch very carefully as it usually indicates significant move in the future.

On January 26th of this year our Triangle indicators issued a sell on Starbucks at 33.65. Since then the stock has evaporated down to the 27 level.

Is the downward move over? According to our triangle indicators I have to say no. I have just finished a new video that details exactly where we think this stock is headed.

Here’s the 5 minute Starbucks video

The Only Three Questions That Count is the first book to show you how to think about investing for yourself and develop innovative ways to understand and profit from the markets. The only way to consistently beat the markets is by knowing something others don’t know. This book will show you how to do just that by using three simple questions. You’ll see why CNBC’s Mad Money host and money manager James J. Cramer says, “I believe that reading his book may be the single best thing you could do this year to make yourself a better investor.

In The Only Three Questions That Count, Ken Fisher challenges the conventional wisdoms of investing, overturns glib theories with hard facts, and blows up complacent beliefs about money and the markets. Ultimately, he says, the key to successful investing is daring to challenge yourself and whatever you believe to be true. Packed with more than 100 visuals, usable tools, and a glossary, The Only Three Questions That Count is an entertaining and educational experience in the markets unlike any other, giving you an opportunity to reap the huge rewards that only the markets can offer.

5 out of 5 stars FABULOUS BOOK July 20, 2007
1 out of 1 found this review helpful

“The Only Three Questions That Count: Investing by Knowing What Others Don’t” by Ken Fisher is the best book I have read on investing in a month of Sundays. Whether you are a pure fundamentalist, a pure technician or a hybrid you will learn a ton about why things happen the way they do in the market and how you can take advantage of it in your investing for your serious money.

All of this and one of the most entertaining books as well! Ken always lets you know that whatever we prognosticate could be wrong so he doesn’t take himself too seriously and won’t let you take yourself too seriously either. It kept my undivided attention for 350 pages!

This book dispels a ton of myths about what causes markets to go up and down and shows you the real reasons that they do. He has the hard evidence there for you. You can see for yourself and not just take his word for it. You come away truly enlightened about what to pay attention to and what to ignore.

BUY IT AND READ IT TWICE!

5 out of 5 stars This book should be part of Finance 101 July 19, 2007
This book is an eye opening look at the myths that the media sells everyday. If you buy into strategies like “Sell in May” or root for the NFC every Superbowl then you need to read this book. I’m just waiting for CNBC to stop selling sensationalism and start talking prudent investing like this book does.

2 out of 5 stars Inconsistent & Unimpressive July 17, 2007
2 out of 2 found this review helpful

Fisher acknowledges that being smarter and better trained is not enough to beat the market based on commonly available news and information. (Page xxiii) Yet he claims that his three questions will allow you to do just that. The inconsistency is breathtaking. By using his three questions, he says, you can know things that others don’t. He is in effect claiming that his three questions will make you smarter than the market, because you will be able to look at publicly available information and then out-think and out-analyze other investors. Sorry, I’m not buying it. Maybe he would be worth paying attention to if his track record were truly outstanding. It isn’t. The book’s Appendix K gives his track record with real investments. His 10 year annualized return is 9.9%, compared to 8.3% for the S&P 500. His return is quite good but not impressive enough to discount the role of luck. What would be impressive? Well, if Fisher really had a handle on beating the market, he ought to be able to beat the market by a convincing margin, say 1000 basis points. Or even 500. Performance that good, or even better, is quite possible. The Olympic standard is Warren Buffet: when he was managing an investment partnership, from 1957 to 1969, he got a return of 29.5% per year before his fee, compared to 7.4% for the Dow. On the other hand, Fisher’s three questions are great questions for stimulating serious thinking. And some of his contrarian arguments are interesting and worth pondering.

5 out of 5 stars The Only Three Questions That Count July 15, 2007
1 out of 1 found this review helpful

Sinple, concise yet complete.Well written and easy to comprehend.
I would recommend it to any potential investor.

A thorough trading guide from a professional trader

The Complete Guide to Technical Trading Tactics can help the new individual investor understand the mechanics of the markets. Filled with in-depth insights and practical advice, this book details what it takes to trade and shows readers how they can broaden their horizons by investing in the futures and options markets. The Complete Guide to Technical Trading Tactics outlines a variety of proven methodologies-pivot points, candlesticks, and other top indicators-so readers may use those that work best for them as well as make their own trading decisions without a second thought. Author John Person also shares his insights on a variety of trading technologies that will allow readers to gain a competitive edge in the market.

John L. Person (Palm Beach, FL) publishes The Bottom-Line Financial and Futures Newsletter, a weekly commodity publication that incorporates fundamental new developments as well as technical analysis using his trading system.

Trading Hardware - trading software reviews

The chart analysis was made from the Hurst Method, which is the easiest Legends Technique to understand and put to almost immediate use.

The Profit Magic of Stock Transaction Timing by J.M. Hurst was published in 1970. Many hundreds, perhaps thousands, of investment or trading related books have been written since then. Few, however, no matter how recently published, can match Hurst’s work for its clarity and completeness.

Hurst was a physicist and worked as an aeronautical engineer for more than 25 years. He was careful to provide the mathematical references for his work although few readers would have the academic training or perhaps even the inclination to pursue the theoretical basis underlying his trading technique. Happily, J.M. Hurst focused his book on the application of the principles and no such rigorous training or mathematical background is required to understand and apply the stock trading method which Hurst laid out in Stock Transaction Timing.

Since, as the title tells us, Hurst set out to create a trading method based on timing the market, or more accurately timing the buy and sell of individual stocks, he first established the reasons that stocks move up and down in price over time. His reasons are the product of nine years of research and 30,000 hours of computer analysis, and he expresses them in the book with a sense of scientific certainty that would probably create some discomfort in investors new to the art of technical analysis. How many times have we heard that you cannot time the market so don’t even try?

Hurst defined the process of stock price fluctuations as a price-motion model. He determined that 75% of all stock price movement is due to relatively foreseeable fundamental factors pertaining to the stock market as a whole, to sectors and industries within the market, and to individual stocks within the industry groups.

As you can see Hurst’s price-motion model, although it is a timing system, is not a repudiation of the adage about market timing, but more of a confirmation of it. 75% is a very large influence. And because the secular trend of the US markets at least has been up for more than 200 years a Buy & Hold strategy makes eminently good sense over the long haul. Hurst’s price-motion model also maintains the integrity of fundamental analysis as a worthwhile exercise of stock market investing.

Perhaps most surprisingly Hurst determined that macro random events, like news shocks, which in his time would have been epitomized by the assassination of President Kennedy, and global events such as war, even when combined with micro random events, like an individual liquidating a stock portfolio to buy a summer house, account for only 2% of stock price movement in the price-motion model. Hurst readily acknowledged that the short term affect of purely random events on stock prices could be large but that the movement would still be only temporary.

The remaining 23% of stock price movement in Hurst’s price-motion model was determined to be the result of semi-predictable oscillations. These oscillations are caused by the aggregate sum of several (non-ideal) periodic fluctuations, better referred to as cycles. The nominal stock market cycles identified by Hurst are consistent with the periodicity of cycles determined by researchers subsequent to the publication of Stock Transaction Timing.

In the next part we will discuss how to take advantage of the 23% cyclic contribution and why that is so important for achieving superior investment returns.

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