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making money in the current financial meltdown


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EVALUATING GOOD STOCKS TO PICK

Picking winning stocks involves understanding what makes one stock great and another stock ho-hum. It involves getting your hands dirty with financial ratios and looking at markets, but finding good investments is not as hard as you may think. 1,ROI(RETURN ON INVESTMENT) is a Leading Measure of Company's Efficiency 2,Picking Stocks begins with Assessment of Need 3,Following the Stock Market Herd Often Wrong Decision 4,Don't try to Time Bottom of Falling Stock Market 5,Understanding What Effects(what move the prices) Stock Prices 6,A Good Company with a low P/E(PRICE EARNING RATIO) 7,understand the cashflow statement explicitly 8,What is an Economic condition and Why should Stock Investors Care
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The science of money making in investment

Yesterday's technical look at ProShares Ultra Financials ( UYG ) didn't help much, as it showed a slightly bullish bias going into a day that saw the market sell off again to the tune of -9% for the S&P 500.It's important to distinguish your time frames when trying to profit from this market. If you're looking to pull money from it each day or week, then tight stops are essential, per my Tuesday article on UYG and ratcheting stops higher to lock in gains. The leveraged ETFs are moving so much each day that they're like money machines if you watch them closely and catch just a small part of a trend -- or a big trend like Monday's surge higher for the longs or yesterday's plunge lower for the shorts.Here's how that can look when done right. On Monday, you would have seen UYG bouncing off support at $10 after surging upward from $8 Friday. You wouldn't care about missing the 25% run from $8 to $10 (unless you already owned it on Friday when it was ...
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understanding market dynamics

Dramatic market action that is common at tops and bottoms is known as blow offs and selling climaxes. Blow offs occur at tops, they usually occur after prices have moved higher over an extended period of time. At the end of the upward moves, prices rally sharply accompanied by a large increase in volume. Typically, all of those that were going to buy at this level have done so. Profit taking occurs and prices reverse, often suddenly, to the downside. Selling climaxes are simply the opposite of blow offs. They occur at the market bottom after prices have been declining for an extended period of time. Bargain hunters then jump in buying, reversing the trend, and sending prices higher. Through the years, investors have searched diligently for ways to identify important market bottoms. And the selling climax has been one of the major focuses of that search. A selling climax is generally defined as that capitulation of investors near major market bottoms, in which stocks are dump or abandon...
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