[\/et_pb_accordion_item][et_pb_accordion_item title=”9\/21\/2012 The Shiller P\/E Ratio” _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n
indicates that the prices in the stock market are very high. The P\/E ratio is higher than in 1900, 1929, 1966 when the ratio was at the top before crashes or long decline. It is still below the peak of the P\/E ratio in 2000 but it is getting close.<\/p>\n
The question is when will this bubble end. Usually there is a recognition when specific news trigger a reassessment.<\/p>\n
See below the picture.<\/p>\n
![\"The](\"https:\/\/www.qc.cuny.edu\/academics\/cpp\/wp-content\/uploads\/sites\/122\/2022\/01\/ShillerPERatio1-1024x466.png\")
<\/p>\n
[\/et_pb_accordion_item][et_pb_accordion_item title=”10\/21\/2020 Mergers and LBO in distressed industries” _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n
Traders are excited by the evolution of prices in technology.<\/p>\n
There are also other opportunities. In distressed industries such as transportation, lodging and energy private equity firms are interested in buying firms and corporations a looking for mergers. See articles below.<\/p>\n
These transactions usually increases the price of the stock of the firm targeted.<\/p>\n
https:\/\/www.wsj.com\/articles\/pioneer-natural-resources-to-buy-parsley-energy-for-4-5-billion-11603224139?mod=markets_minor_pos4<\/a><\/p>\n https:\/\/www.wsj.com\/articles\/leveraged-buyouts-come-roaring-back-after-coronavirus-related-lull-11603272600?mod=markets_lead_pos4<\/a><\/p>\n [\/et_pb_accordion_item][et_pb_accordion_item title=”9\/16\/2020 Copper: commodities recover” _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n As economic activity is growing again, and in some part of the world strongly, then the price of commodities is increasing. It is a rebound. An opportunity for speculation.<\/p>\n https:\/\/sponsor.marketwatch.com\/cme-group\/the-importance-of-copper-in-chinas-economy\/?utm_medium=MarketWatch&utm_source=1118225_1_mw_frontpage_native_global<\/a><\/p>\n [\/et_pb_accordion_item][et_pb_accordion_item title=”9\/16\/2020 Merger Activity as Signal” _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n Interesting article about mergers:<\/p>\n It is true that most of the number of mergers is growing during a boom to the point where it becomes huge. There is a peak in mergers so it is at this moment that there is a peak in the stock market, and we then enter into a bear market.<\/p>\n https:\/\/www.marketwatch.com\/story\/the-ma-surge-is-it-rational-exuberance-or-a-frenzy-before-the-market-falls-2020-09-15?&mod=home-page<\/a><\/p>\n A lot of tech firm see their stock go up a lot so they may take advantage of it and try to buy other firms that are in difficulty<\/p>\n [\/et_pb_accordion_item][et_pb_accordion_item title=”9\/9\/2020 First Session” _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n Here is the video of the first session for the trading competition: Click Here<\/a><\/p>\n <\/p>\n [\/et_pb_accordion_item][et_pb_accordion_item title=”9\/9\/2020 Shorting” _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n You can make profits the traditional way which is to buy first and sell after. It is what you do when you forecast that the stock will go up.<\/p>\n However, if you think that the stock will go down, you can use shorting to make profits. You sell first and buy later. See the video below for more explanations.<\/p>\n It is an important tool for the competition. particularly these days. There is a strong rally in the stock market and specifically an exciting boom in tech stocks. Is it justified or not?<\/p>\n 1\/ On one hand Covid-19 forced the economy to transform faster than expected with technology. So it makes sense to be positive about the revenues that tech firms will generate in the future.<\/p>\n 2\/ On the other hand, did speculators and investors go too far in term of valuation? It is a typical dilemma and characteristic of a exuberance. It is the normal evolution of the stock market as investors have to deal with uncertainty. However, corrections take place regularly. It may be a time to start to think about shorting as P\/E ratios for tech firm are very high.<\/p>\n Shorting is dangerous. Sometimes, when you forecast is not accurate, the stock may jump up: it is a short squeeze and you loos a lot of money.<\/p>\n Here is an article from the Wall Street Journal:<\/p>\n https:\/\/www.wsj.com\/articles\/short-selling-stocks-proves-costly-for-some-investors-11599645600<\/a><\/p>\n Timing is important and you never really know when a exuberant boom will end.<\/p>\n Notice also that as the economy is restructuring, some industries benefit from it but other industries are suffering.<\/p>\n [\/et_pb_accordion_item][et_pb_accordion_item title=”9\/9\/2020 Gold” _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n Gold went up a lot the last few weeks.<\/p>\n It is mainly related to the actions of central banks. See the articles from the Wall Street Journal:<\/p>\n https:\/\/www.wsj.com\/articles\/why-gold-prices-high-warren-buffet-11597691966<\/a><\/p>\n You can use an ETF to trade gold.<\/p>\n [\/et_pb_accordion_item][et_pb_accordion_item title=”10\/18\/2019 Fed Cut?” _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n Of course, one of the big player is the Federal Reserve: https:\/\/www.wsj.com\/articles\/fed-eyes-another-rate-cut-weighs-when-to-stop-11571391003?mod=hp_lista_pos3<\/a><\/p>\n Click here<\/a> for some basic explanations why the yield curve is important.<\/p>\n It could be a break in technical analysis point of view. The explanation is coming soon.<\/p>\n [\/et_pb_accordion_item][et_pb_accordion_item title=”10\/18\/2019 Strategy from Earning Season” _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n A common strategy that traders use is to observe the evolution of prices of a group of stocks belonging to the same industry after a news such as earnings. The idea is that if the price goes down for all the stocks of that group but one is going down much less than the others, or even better stays flat, then when the overall group is going up again you should particularly trade that stock. The price didn’t go down that much compered to the others because the market thinks that the firm is more solid.<\/p>\n It would be interesting actually to test that strategy.<\/p>\n [\/et_pb_accordion_item][et_pb_accordion_item title=”10\/10\/2019 It is earning season:” _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n this month, a lot of companies are going to report their quarterly earnings.<\/p>\n What usually happens is that analysts have expectations about earnings and if a company provides higher earnings then it is positive, if it provides lower earnings, then it is a negative news.<\/p>\n It is relatively difficult to trade this kind of news as so many traders are active at this moment. However, another possibility is to trade other stocks from the same industry. If for example an airline company has lower earnings than expected and it is due to general conditions of the market, then competitors will probably be affected the same way.<\/p>\n Also, if you understand the underlying causes behind the fact that earnings are higher or lower than expected, you may also then understand how it affects other industries, some commodities or some currencies.<\/p>\n Sometimes, a firm may beat expectations but the outlook doesn’t look good. See Delta Airlines for example: https:\/\/www.wsj.com\/articles\/stocks-to-watch-pg-e-apple-at-t-target-american-airlines-boeing-11570699609<\/a><\/p>\n [\/et_pb_accordion_item][et_pb_accordion_item title=”10\/09\/2019″ _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n The price of cocoa<\/strong> increased, and may still increase due to a new pricing method before market corrects:<\/p>\n https:\/\/www.wsj.com\/articles\/west-african-poverty-alleviation-program-makes-cocoa-this-years-hot-commodity-11570622401?mod=hp_lista_pos1<\/a><\/p>\n The ETF for cocoa is NIB.<\/p>\n Click here<\/a> to see the technical analysis.<\/p>\n Be careful… you two types of traders, the contrarian and the trend follower. On principle however, it not to chase the stock. If you missed the opportunity, you missed it! You may still trade here as a trend follower.<\/p>\n [\/et_pb_accordion_item][et_pb_accordion_item title=”10\/09\/2019″ _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n The euro<\/strong> seems to continue to decline as the european central bank is aggressively pursuing a quantitative easing :<\/p>\n https:\/\/www.wsj.com\/articles\/how-low-can-the-euro-go-11570098097?mod=hp_lista_pos3<\/a><\/p>\n The ETF for euro is FXE.<\/p>\n Click here<\/a> to see the technical analysis. Charts are from Stockcharts.com<\/p>\n Other countries lowered their interest rates: Thailand, and India for example. Look at their currencies<\/strong>. Look at the Barron’s article; the currency market may get into turmoil.<\/p>\n https:\/\/search.proquest.com\/docview\/2287071564\/390E0DDAFE0443FBPQ\/4?accountid=13379<\/a><\/p>\n <\/p>\n [\/et_pb_accordion_item][et_pb_accordion_item title=”10\/04\/2019″ _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n The news doesn\u2019t seem very good for manufacturing<\/strong>:<\/p>\n https:\/\/www.wsj.com\/articles\/here-is-how-interconnected-manufacturing-is-across-the-globe-11570096801?mod=hp_major_pos2<\/a><\/p>\n But there is an excellent article on Barron\u2019s on the relationship between manufacturing and yields:<\/p>\n https:\/\/www.barrons.com\/articles\/manufacturing-data-will-improve-and-these-stocks-will-benefit-analyst-says-51570111831<\/a><\/p>\n The author highlighted four stock.<\/p>\n Look at the different stocks from manufacturing to see if there are opportunities.<\/p>\n From his article, Tom Lee also mention office REIT, trucking and steel.<\/p>\n For manufacturing, we can use ETF Industrial such as XLI.<\/p>\n Click Here<\/a><\/strong> to see the technical analysis of the ETF XLI. Charts are from Stockcharts.com.<\/p>\n [\/et_pb_accordion_item][et_pb_accordion_item title=”10\/02\/2018″ _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n For geopolitical reasons, the price of oil<\/strong> continues to go up. Sanctions on Iran and chaos in Venezuela may continue to bring the price of oil higher even if the U.S. is producing more.<\/p>\n https:\/\/www.wsj.com\/articles\/reignited-rally-sets-off-talk-of-100-oil-1538305201?mod=djcm_engmt_jrq3mro&id=40e8aecf9c87226b69985253412fcc51b79f435ff9b8f4ba7b222be8bd878f0d&token=undefined<\/a><\/p>\n You can trade futures, options and ETF.<\/p>\n ETF on oil are: http:\/\/etfdb.com\/etfs\/commodity\/crude-oil\/<\/a><\/p>\n [\/et_pb_accordion_item][et_pb_accordion_item title=”10\/02\/2018″ _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n Every three months, Wall Street focus on earning reports<\/strong>. Publication of earnings could provide opportunities for trading. Don’t forget that the announcement of earning for one firm could also affects the price of stocks of other firms within the same industry.<\/p>\n https:\/\/www.thestreet.com\/event-calendar\/index.html<\/a><\/p>\n [\/et_pb_accordion_item][et_pb_accordion_item title=”9\/27\/2018 U.S. Dollar jumps:” _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n the economy is doing well the Federal Reserve is raising interest rates. Foreign exchange is very complicated as many factors play a role. See the slides on foreign exchange.<\/p>\n https:\/\/www.wsj.com\/articles\/u-s-dollar-jumps-after-fed-raises-rates-for-third-time-this-year-1538065654?mod=hp_major_pos21<\/a><\/p>\n You can trade using futures, options or ETF. See below for ETF of U.S. Dollar:<\/p>\n http:\/\/etfdb.com\/etfs\/currency\/usd-us-dollar\/<\/a><\/p>\n [\/et_pb_accordion_item][et_pb_accordion_item title=”9\/27\/2018 A Brazilian oil company settle corruption probes in U.S. and Brazil.” _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n As a consequence the price of the stock (PBR) went up.<\/p>\n 1\/ It is a good news in the sense that there is a settlement and there is no more uncertainty so the firm can move on.<\/p>\n 2\/ The price of the stock went up as the news became public, but be careful, it was going up already since end of August. Probably speculators knew better. It is the danger to trade news.<\/p>\n https:\/\/www.wsj.com\/articles\/petrobras-to-pay-853-2-million-to-settle-corruption-investigations-in-u-s-brazil-1538051052?mod=hp_lead_pos7<\/a><\/p>\n So technically it is a little bit high: the price reaches the 200 moving average, it is near resistance level and the RSI and STO are high. See the slides on technical analysis for more understanding.<\/p>\n See the chart below: Chart courtesy of StockCharts.com \/<\/strong> website at https:\/\/stockcharts.com<\/a>.<\/p>\n [\/et_pb_accordion_item][et_pb_accordion_item title=”9\/25\/2018 Move to defensive stocks:” _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n as the bull market is lasting already almost 10 years, hedge funds are becoming cautious and shift there money on defensive stocks such as Healthcare. Good opportunities.<\/p>\n See slides on sector allocation: it is the slides about fundamentals and it is the one titled “Industry Analysis”. Each industry has its own evolution when the economy and the overall markets are moving.<\/p>\n https:\/\/www.wsj.com\/articles\/health-care-stocks-lead-this-leg-of-rally-after-tech-giants-stumbles-1537867801?mod=hp_lead_pos7<\/a><\/p>\n You can try to select specific stock of that industry or choose an ETF related to this industry (see slides about definition of ETF). For the list of ETF in healthcare, see below:<\/p>\n http:\/\/etfdb.com\/type\/sector\/healthcare\/<\/a><\/p>\n [\/et_pb_accordion_item][et_pb_accordion_item title=”Fall 2018 Trade War” _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n does the trade war affect significantly the american economy? It is a big debate, but Wall Street seems to be looking at it carefully. It is an opportunity to trade the news about it.<\/p>\n Here is an article from the Wall Street Journal: https:\/\/www.wsj.com\/articles\/global-stocks-pause-after-recent-gains-1537428686?mod=hp_lead_pos1<\/a><\/p>\n Reminder: you have access for free to the Wall Street Journal through Queens College.<\/p>\n [\/et_pb_accordion_item][et_pb_accordion_item title=”Fall 2018 Quad Witching:” _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n this Friday September 21, traded futures and option contracts will expire with in addition to rebalancing several major index.<\/p>\n See the following article from the Wall Street Journal: https:\/\/www.wsj.com\/graphics\/companies-worth-trillions-change-sectors-friday\/?mod=article_inline?mod=hp_lead_pos2<\/a><\/p>\n [\/et_pb_accordion_item][et_pb_accordion_item title=”Fall 2018 Nike:” _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n after the controversial add, the price of the stock declined but it rebounded strongly since. Maybe an example of a trading opportunity later for other firms. It maybe interesting to see the effect on competitors.<\/p>\n See the article from the Wall Street Journal: https:\/\/www.wsj.com\/articles\/nike-leads-rebound-for-athletic-apparel-retailers-1537444800<\/a><\/p>\n [\/et_pb_accordion_item][et_pb_accordion_item title=”Fall 2018 Oil and cartel:” _builder_version=”4.14.5″ _module_preset=”default” global_colors_info=”{}” open=”off”]<\/p>\n many factors play a role in the price of oil. The policy of OPEC is one of them.<\/p>\n\n
![\"Brazilian](\"https:\/\/www.qc.cuny.edu\/academics\/cpp\/wp-content\/uploads\/sites\/122\/2022\/01\/9-27-2018-brazilian-oil-company-chart.png\")
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