Blog Archives

How to Profit from Rising Volatility

Stock market volatility is often wrongly portrayed by the mainstream media as an enemy. In reality, it’s not.

First, prudent investors use volatility (ChicagoOptions:^VIX) as an effective tool to measure the stock market’s psychology. Why? Because excessive bullishness or bearishness in market prices is instantaneously reflected in the VIX.

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Love Affair with High Risk Debt Overtakes Bond Market

The most important single factor in shaping security markets is the public’s psychology. That was Gerald Loeb’s observation about how financial markets operate. And history has proven this assessment to be consistently true. What about now?

Although the broader bond market (NYSEARCA:AGG) is generally considered to be a more conservative place to invest versus stocks,

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Excessive Bullishness Toward Gold Points to a Retreat

Sentiment extremes, regardless of whether they’re bullish or bearish, invariably point to a readjustment in prices. This undeniable truth applies to all asset classes in all time frames.  Nothing is immune to the forces of crowd behavior. (See Beanie Babies and Pokemon cards)

On Jan.23, 2015 the Wall Street Journal declared “Buyers Take a Shine to Metals Again.” When this headline was published,

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Are Stocks Ignoring the Bond Market’s Warning?

After gaining five consecutive years and gaining nine out the past 10 years, the U.S. stock market is on a roll. And while it’s easy to become complacent, warning signs are already showing up in the bond market.

(Audio) Listen to Ron DeLegge @ The Index Investing Show

The chart below illustrates how risk appetite in the bond market is shifting away from high risk to safety by favoring top credit graded U.S.

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Equity Bearishness Sinks to 20 Year Lows

Is pessimism about the stock market really as high as equity bulls claim?

One measure of the stock market’s mood is the Investor’s Intelligence Sentiment Index, which offers us a compact view of how market participants feel toward stocks.

The latest II data shows that bearish sentiment or pessimism toward stocks (NYSEARCA:IVV) has now hit 20-year lows,

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