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You live and breathe trading. You can't get enough.
Guess what? Neither can the advisors at 24/7 Trader!
At 24/7 Trader, you have full access to some of the market's most experienced and successful options trading experts.
These advisors have seen it all, and they've backed up the truck in all kinds of markets. What better way to learn (and profit) than from someone else's experience? Our experts are sharing their time-tested advice with you today in this free report. Knowledge and confidence are critical in achieving your financial goals, and that's what the advisors are here to give you.
Whether you track the technicals or you're more of a fundamentals type, the advisors at 24/7 Trader are ready to meet your needs.
24/7 Trader is your home for turning real-time info into big-time money.
Let's meet the advisors and find out what sectors they have their eye on for the year!
They are passionate about finance and helping both novice and experienced traders increase their portfolios. As Co-Editors of SlingShot Trader their original goal was to create the best-in-class trading advisory service where you can make profits while keeping your risks in check.
John Jagerson, Co-Editor of SlingShot Trader, has worked in the capital markets and private equity for most of his career, including investing, writing, education and money management.
John is the co-author of Profiting With Forex: The Most Effective Tools and Techniques for Trading Currencies (McGraw-Hill, 2006). He has been the featured trader in BusinessWeek's Stock Trader newsletter and has written for numerous financial publications. John's commentary and educational articles are regularly featured across the Web including 24/7 Trader. He was a managing partner at Ouroboros Capital Management and is the co-founder of learningmarkets.com.
S. Wade Hansen, Co-Editor of SlingShot Trader, is a founding member of learningmarkets.com - a source for free investment education and daily analysis of the stock, options and Forex markets as well as a frequent contributor to 24/7 Trader.
Wade is the co-author of Profiting With Forex: The Most Effective Tools and Techniques for Trading Currencies (McGraw-Hill, 2006). He also has written for Yahoo! Finance, Forbes.com, Nasdaq.com and BloggingStocks.com. He has an MBA from the University of Utah and was a managing partner at Ouroboros Capital Management.
As co-editors of SlingShot Trader, they combine their two great passions in order to help investors gain more confidence and make bigger profits trading options. They live and breathe investing—virtually every aspect of it, from stocks and options to futures and Forex.
Whether you're new to options trading or have been in the trenches for years, their traders find that having access to their insight and rationale can help them stay focused in even the most trying markets. If you've ever exited a trade too early or got in too late, you'll want to check out SlingShot Trader where they will guide you every step of the way helping you become a better, more profitable trader.
Recently, they celebrated some great wins in SlingShot Trader, including:
Because there are so many factors that push and pull on this market at any one time, very rarely are they completely bullish or completely bearish in the SlingShot Trader portfolio. Rather, they ensure you have the best exposure to profit from specific names that are set to move because of earnings, as well as broader sectors that might be impacted by world events or economic activity.
Sector rotation describes the relationship between risky and defensive stock sectors during the business cycle. When traders are expecting growth, high-risk sectors tend to outperform as investors are willing to take more risk for a greater potential reward. The opposite is true as growth expectations begin to decline–as investors are less willing to take risks, defensive sectors like health care, utilities and consumer staples tend to outperform.
Last quarter, they saw defensive sectors come into favor after the fiscal cliff fervor–and they rallied in a way no one could have expected. They were able to pull the market indexes higher despite the fact that the larger and riskier groups were rotating out of favor and declining.
Over the last few years, this rotation has been cycling on a three to five month basis, which means that unless there is a larger disruption in the market, riskier sectors should be rotating into favor now.
The two risk-on sectors that they are currently targeting are technology and housing-related stocks.
The most significant confirmation of sector rotation tolook for right now would be to see risky sectors, like technology, definitively outperform defensive groups–and that appears to be happening. In the chart below, you can see a graph of the SPDR Technology ETF (XLK) that has broken through the highs set during the last "risk on" rotation in 2012. This is a partial confirmation of the shift to a risk-on environment.
SPDR Technology ETF (XLK) w/ Relative Performance vs. SPDR Consumer Staples ETF (XLP)
Chart Courtesy of MetaStock Professional
Another indicator confirming the strength of tech stocks (and risk-on sectors in general) is the relative strength comparison between the technology ETF and the SPDR Consumer Staples ETF (XLP). The downtrend in the indicator since late last year means that defensive consumer staples stocks have been outperforming tech. As you can see, it's been creeping up since mid-April. To provide definitive confirmation that traders are looking for risk-on assets, look for tech to break through the lows on the indicator around 0.80.
The reason a break above the indicator's resistance level is important is that investors may still be anxious to flip back into a defensive stance in the near term if the market hits any bumps. If resistance holds, don't expect defensive sectors to be able to pull off the same gains they did last time. Breaking above resistance would indicate that investors aren't interested in moving back into defense and it should accelerate the broader market trend.
In addition to tech, another bull trend is developing in housing stocks. Two main factors seem to be driving this move. First, the Fed's zero interest rate policy (ZIRP) and its bond and mortgage-backed security (MBS) buying programs have had a positive effect on not only the U.S. stock market, but also the U.S. housing market.
Home values are rising, and fewer and fewer homeowners are underwater on their mortgages. This leaves homeowners able and willing to invest in fixing up their homes. It also puts potential homeowners in a better position to be able to afford, and fix up, homes of their own. Second, a large number of financial firms have jumped into the residential rental market by buying and fixing up homes and then turning them into rentals that they pool in real estate investment trusts (REITs).
There are many ways to play the housing sector, from the usual suspects like KBH Homes (KBH) and Lowes (LOW) to more unusual ones like Deere & Co. (DE), Toro Company (TTC) and Snap-on (SNA), which have diversified exposure to many areas of the housing and construction sector.
Jon Markman is the editor of Trader's Advantage, a daily trading service that leverages his unique swing trading principles and aims to capture profits of 15% to 40%—and often as much as 100% to 200%—in less than 90 days. By combining technical analysis with underlying fundamentals, Jon recommends beaten down stocks on the brink of reversal and powerful momentum stocks breaking out to new highs.
Recently, Jon launched CounterPoint Options to help traders capture profits from the VIX, commonly known as the "fear index." A direct play on the volatility that's come to define the current market, VIX options are also user-friendly from a pricing standpoint. That's because the VIX is the most liquid and heavily traded instrument in the options world, which means that there are endless opportunities and getting into and out of trades for profits isn't a problem.
A pioneer in the development of stock-rating systems and screening software, Jon Markman is co-inventor of two Microsoft patents and author of the best-selling books Swing Trading and Online Investing. He was portfolio manager and senior investment strategist at a multi-strategy hedge fund from 2002 to 2005; managing editor and columnist at CNBC on MSN Money from 1997 to 2002; and an editor, investment columnist and investigative reporter at the Los Angeles Times from 1984 to 1997.
Jon thinks the most successful traders use a mix of stocks and options to generate returns, like the 11% he made shorting NetApp (NTAP) stock over a two-week period, but the profits options trades have given him underscore just how important they can be to your portfolio:
Below, he's shares two sectors that he's currently watching closely.
One of the raps against the earlier stage of the advance this year was that only defensive stocks were making new highs, and that was supposedly unhealthy. Now it turns out that the only thing that was unhealthy was the obsession with the notion that staples makers cannot lead, because it turns out that they did a very nice job in the vanguard while banks and energies were gathering their strength in the back of the formation.
The important piece of this observation for your portfolio is that a lot of these energy and financial companies are still relatively cheap. Some analysts say that energy and industrials are as much as 35% undervalued versus consumer staples, which is always a guess but gives you an inkling of how much the rally could persist just by the fact that investors turn to a new group to lift up.
This means that institutional fund managers can take part in this rotation without hating themselves in the morning, and that you can ride on their coattails by focusing on stocks in these two sectors.
Consider the case of stocks like Exxon Mobil (XOM), Royal Dutch Shell (RDS-A) or British Petroleum (BP). They are three of the largest companies on the planet and the most leveraged to a global cyclical upturn, should there be one. They have the world on a string, they pay 5% or better dividends, and yet their stocks have been stuck in low gear for the past couple of years and their trailing price/earnings multiples are 8 and 9.
It doesn't take a lot of imagination to expect them to be a little more appreciated in the year to come, and see their multiples at least rise to 10 to 11, which would push their shares up 15% to 25% to join their brethren Conoco (COP), Chevron (CVX) and our old friend Cabot (COG) in breathing the sweet clean air of fresh highs. And if that is true, in turn, they would push the broad market indexes higher due to their sheer size in market cap weighted indexes. Think about that.
Despite the market's confusion surrounding QE tapering, the continued focus on the potential for less aggressive policy accommodation remains a significant tailwind for the banking group. Financials in particular are beneficiaries of rising bond yields, the tapering obsession, the recovery theme and positive commentary from optimistic brokers.
The Bank Index ($BKX) has been in an extended uptrend led by money-center names Bank of America (BAC), Citigroup (C) and JP Morgan (JPM). Economist commentary argued that the move in mortgage rates is unlikely to dent the momentum in homebuyer activity, particularly given expectations for continued house appreciation. In addition, Deutsche Bank pointed out that a 1 percentage point rise in interest rates should be positive for bank stocks as it would likely boost net interest margins (i.e. their profits) without meaningfully hitting book value.
Mega-caps on the new high honor roll included a lot of big banks and brokers, including Wells Fargo (WFC), JP Morgan (JPM), Citigroup (C), Bank of America (BAC), Goldman Sachs (GS) and Morgan Stanley (MS).
The SPDR Financials (XLF) is an attractive buy, as it just keeps roaring higher. But, relatively speaking it is still cheap, surprisingly. Banks are leading beneficiaries of higher interest rates as the best proxy for their profitability is a measure called "net interest margin," or NIM—the spread that they earn by lending out money dear after obtaining it cheap.
You see in a rising rates environment, banks keep getting money for next to nothing from the Fed while getting paid more from borrowers. Nice work if you can get it, huh? One of the prime objectives of the whole quantitative easing scheme has been to improve banks' balance sheets to the point where they can start lending more, so this is all part of the plan. It's structural, which is just as good if not better than being fundamental. It's like betting on the casino.
This has been one of the best sectors of the year, and should continue to lead if bulls keep shrugging off danger signs.
As the nation's foremost professional options trader, Ken Trester is not just another "options educator." He is a pro who has been trading options since the first exchanges opened in 1973 with a winning streak that goes all the way back to 1984 and money-doubling average annual profits since 1990.
In fact, Ken puts his money where his mouth is and actively trades his own account each and every day as part of his popular Maximum Options service. Using his own proprietary system, Ken uncovers up to 10 low-cost, high-potential options trade recommendations each week, from single-option plays to spreads and also offers access to his top stock picks each week. He has a two-pronged approach to profiting - by uncovering options that are undervalued, you profit when they start trading up (or down) to their fair value PLUS you also benefit from the underlying stocks' momentum. Amazingly, he's closed out 9 credit spreads for 100% gains in 2013 alone, and his single options trades have yielded great returns like:
There are only a few stocks every week that give signals strong enough to make them a candidate for profitable options trading. Ken Trester has looked through the list of Power Stocks and picked out the most volatile and liquid trades. He's also taken stock price movement and theoretical option values into account.
And that research has yielded a stock that stands out among the rest for options trading. Read on for how to trade it.
As someone who has been trading options since the first exchanges opened in 1973 (and with a winning streak that goes all the way back to 1984, no less), you might say that I'm an old hand at the options game. Some might consider that a disadvantage, when the options market seems to change so quickly–new indicators, new systems and even new products like mini-options are touted as game-changers. But I'm happy to quietly prove the naysayers wrong.
I've found that the best way to trade options is not to try and predict the future with fundamentals or chart patterns. Instead, I stick to my quantitative system– a proprietary computer program that uses multiple regression analysis and other statistical tools to unearth the few stocks that are building momentum and poised to make a quick burst. That's key for options traders.
My Power Stocks program spots the following elements in every stock and stock group: 1) power index, 2) relative strength, 3) support, resistance levels, volatility and 4) key indicators telling which stocks are ready to break out.
Using this proprietary system, I uncover up to 10 low-cost, high-potential options trade recommendations each week, from single-option plays to spreads and I also offer access to my top stock picks each week. My main tactics are to uncover options that are undervalued, so you profit when they start trading up (or down) to their fair value. PLUS you also benefit from the underlying stocks' momentum.
I don't have a particular allegiance to the bullish or bearish side, or to a particular sector or investment vehicle. I follow what my quantitative system tells me and I base my trades on that.
So as you might imagine, I sat up and took notice when my system showed all of the stocks in a particular sector flashing "Strong Buy" signals. Even more surprising was that my system showed two sectors that are looking incredibly strong.
In the aerospace and defense sector, my system is showing strong buy signals across the board. The top performers in this area are Boeing (BA), General Dynamics (GD), Lockheed Martin (LMT) and Northrop Grumman (NOC). All have turned around from a lack of bullish prospects over the past six months to show incredible strength for short-term trades.
I recommend buying any of these powerhouse stocks.
In the medical sector, there are several fundamental headwinds that are breathing life into the area, from President Obama's health care act to the increased elderly population in the United States. My quanitative system is confirming that some of the biggest hospital stock names are showing a bullish bias. And that's great for traders, since big companies have the best liquidity, thus avoiding unpredictable price swings caused by just a few individuals or institutions.
All three of the top stocks in this sector–Abbott Labs (ABT), Johnson & Johnson (JNJ) and C.R. Bard (BCR)–are all showing incredibly bullish price patterns, making any one of them an excellent buy.
John Lansing is not your typical Wall Street insider, but that hasn't stopped him from making tons of money using his own winning stock market trading strategies. In fact, he started his career in hotel restaurant management, but his penchant for numbers, his photographic memory and a burning desire to "make good" led him to his true calling - technical trading.
With this amazing "Midas touch" at picking option trades based on solid stock analysis, John launched Parabolic Options, his weekly options trading service geared toward helping individual investors double their money in three weeks or less with short-term, highly leveraged and easy-to-execute option trades.
After more than two decades of trading experience, John wouldn't stick with technical analysis if it didn't work. It's led Parabolic Options traders to profits like these:
At Parabolic Options, John typically works 15-hour days on his subscribers' behalf, tirelessly tracking 238 different sectors and subsectors of the market - more than 16,000 different investment vehicles - to find winning, easy-to-execute options trades.
My methodology is all about the charts. Some traders may pore over annual reports and earnings statements, but I listen instead to what the charts and historical pricing are telling me. Technical analysis can reveal extremely short-term opportunities (trades that are opened and closed within a few minutes like we execute in my live Power Trading at the Open service), but most traders prefer more medium-term opportunities that play out in a matter of a few weeks.
I've created some very sophisticated programs to help me identify these opportunities, but one tool that I used in my own trading that I also share with my Trending123 members is the Pattern Scan powered by Recognia. The Trending123 Pattern Recognition Scan is interactive software that scans more than 16,000 securities on nine exchanges in the blink of an eye, looking for any of the 4 million technical chart patterns that can show you exactly where your stocks are headed. You can separate out sectors, bullish opportunities, bearish opportunities and even how long the move is expected to play out.
Today, we'll look at two sectors that the Pattern Scan powered by Recognia revealed that should show strength for the next three to eight weeks ahead - and I'll even give you a few specific stocks the Pattern Scan uncovered within those sectors.
I follow the currency markets closely because in the whole market "food chain," currency markets frequently give us insight into how the broader market will move in the future. While I don't want to muddy the technical analysis waters, I can say that there are several currency developments right now that underscore why manufacturers could benefit and, hence, move up in the intermediate term.
But based purely on the charts, when I ran the Pattern Scan powered by Recognia, it showed numerous bullish charts in the manufacturing sector, particularly the consumer and industrial goods subsectors. There were some patterns set to play out in as quickly as eight days or as long as 265 days, but below are the top bullish manufacturing stock charts the Pattern Scan uncovered, along with a little bit about their accompanying patterns.
P&F Industries (PFIN) is a smaller company that makes and distributes tools and hardware, but its chart is showing anything but small gains.It's gearing up for a run based on its bullish continuation diamond pattern, which you can see on the chart below.
This pattern tells traders the price has broken upward out of a consolidation period, suggesting a continuation of the prior uptrend. The pattern begins during a downtrend as prices create higher highs and lower lows in a broadening pattern. Then the trading range gradually narrows after the highs peak and the lows start trending upward. When the price breaks upward out of the diamond's boundary lines, it marks the resumption of the prior uptrend.
Technical analysis patterns can tell traders approximately how far a stock will move and how long it will take. In PFIN's case, the upward target is $10.60 - $11.20 and it's a longer-term trade that should play out within the next year.
Plain and simple, The Greenbrier Companies (GBX) manufactures all sorts of railroad freight supplies. Its chart is showing a bullish symmetrical continuation triangle that is perfect for traders who want a shorter time frame.
This pattern tells traders the price has broken upward out of a consolidation period, suggesting a continuation of the prior uptrend. A symmetrical continuation triangle shows two converging trendlines as prices reach lower highs and higher lows. Volume diminishes as the price swings back and forth between an increasingly narrow range, reflecting uncertainty in the market direction. Then, well before the triangle reaches its apex, the price breaks out above the upper trendline with a noticeable increase in volume, confirming the pattern as a continuation of the prior uptrend.
In this case, the pattern isn't expected to take very long, and GBX should hit its bullish target of $26.20 - $27.00 by yearend.
I love data and technology, and I have personal affinities for many tech companies, but when you remove all of the noise from pundits and analysts and simply focus on the charts, they can tell you what's going to happen better than some talking head. When I ran the Pattern Scan powered by Recognia, it turned up several strong contenders in the tech sector, particularly information and data technology companies. Have a look at some of the Pattern Scan's potentially bullish plays.
Perficient (PRFT) is a tech consulting firm that has seen steady growth. PRFT's chart is showing an ascending continuation triangle. This pattern shows that buyers are more aggressive than sellers, confirmed by a breakout through a resistance level to signal a continuation of the prior uptrend. The pattern typically forms because a supply of shares is available at a certain price, represented by the upper flat line. When the supply depletes, the shares quickly break out from the top trendline and move higher.
In the intermediate term, the Pattern Scan powered by Recognia has set a target on PRFT of $16.50 - $16.90, and the pattern should resolve in the intermediate term.
Information technology company iPass (IPAS) offers cloud-based business solutions. The stock has been on a tear since early June, but the technical pattern indicates there's plenty more upside ahead. IPAS is in a bottom triangle pattern, which tells traders the price seems to have reached a bottom, showing signs of reversal as it has broken upward after a period of uncertainty or consolidation. A bottom triangle shows two converging trendlines as prices reach lower highs and higher lows. Volume diminishes as the price swings back and forth between an increasingly narrow range reflecting uncertainty in the market direction. Then well before the triangle reaches its apex, the price breaks above the upper trendline with a noticeable increase in volume, confirming this bullish pattern as a reversal of the prior downtrend.
The Pattern Scan powered by Recognia puts a target of IPAS at $2.85 - $3.00.
Bonus Trade #1 from Trader's Advantage:
Cabot Oil & Gas (COG) is a medium-sized natural-gas producer whose strategy and shares have been among the best in the industry for the past 10 years.
Buy Cabot Oil and Gas (COG) for a $78.00 target, with a $72.75 stop.
Bonus Trade #2 from SlingShot Trader:
Housing Sector :
Now that we know the Fed is likely to continue its strategy of holding rates for real estate and other investments very low, the housing sector could pop right up from support. We like RYL as one of the better fundamental performers in the group, and because of the fact that the stock has been very firm at support of $37.50. We expect an early upside target of $45 on the stock, as investors try to buy in behind the "good" news from the Fed.
'Buy to open' the RYL Sept 41 Calls (RYL130921C00041000) for a maximum price of $2.55.
24/7 Trader would like to help you get started trading options with an amazing special offer to Ken Trester's Power Options Weekly service.
Every Friday morning, during pre-market hours, Ken sends out his top 5 ‘power trades' for the following week. Normally these trades are only shared with his Maximum Options readers, but for a limited time you can gain access to these remarkable trades
This is the perfect way to dip your toe in and give Ken's system a try…
Maybe you've considered yourself an Average Joe S&P investor until now.
Well, here's your shot at turbocharging your profits from a mere 7% to +100%. Ken's past trades have been extraordinarily lucrative including:
The awesome part about his upcoming trades? They're expected to be every bit as profitable! You'll have certifiable proof within 3 weeks that Power Options Weekly can multiply your money many times over! That's because all of Ken's trades are designed to payoff in three weeks or less.
Ken Trester's Power Options Weekly is the perfect ‘bridge' between investing in ordinary stocks and the turbocharged world of options trading.
Right now, you're on the cusp of making a quantum leap in your investing career. Sign up by Wednesday and on Friday morning, before the market opens:
Ken personally reviews and selects the trades on Thursday…
Then applies his own proprietary filter before issuing his 5 Power Trades every Friday morning during pre-market hours.
That's right. Only the Top 5 make it through – out of 255 million actively traded options!
Just as important — the Surveillance System sets targets for getting out of your positions. We always want to hit home runs, however, the key to making money in options trading is to protect your profits. When we have profits on the board, the risk/reward picture is fully evaluated by the Power Options team of experts and editors to determine whether we should capture those gains for instant gratification or whether it's better to wait until a target is hit. When a trade has significant profits of 50% or higher, all the factors are reviewed to decide if it's the ideal time to take your profits off the table. You'll never go wrong by taking profits early. So, we've got you covered there too.
Here's proof that Ken Trester's Power Options Weekly is unique:
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If history repeats, you should be on your way to converting your trades into $1,210… $1,640… or even $9,570 of Power Options Weekly profits.
Good deal? You bet it is!