You only have to think back to major stock market scams like Enron to know that it is almost impossible for the average, and even very sophisticated fund manager or hedge fund trader to really know what the real financial state of a company is.

Just by reading the balance sheet and other quarterly reports they release gives you a very limited insight into the real health of the company. Whereas the technical analysis charts of the company tend to give the real picture of what the market thinks of the value of the company. In the case of Enron even simple technical analysis told you to SELL when the stock was in the $80-90 range, this is why technical analysis of stocks is so popular.

So what is the secret to technical analysis?, I’m about to tell you, here are my golden rules:

* Only use 3-5 simple technical analysis indicators

* Make sure that you understand how the indicators that you have selected work, what the parameter settings are and in what market conditions they are effective

* After selecting your indicators and parameter settings don’t mess with them.

The real secret to technical analysis is to become VERY familiar with your choosen indicators, and really this can only be done by watching and studying the market, so that you get to the point that you TRUST them.

The fact is that in any market, for each bar, there are only 5 pieces of information, the open, close, high, low and volume, yet there are now hundreds of indicators. Most of these indicators are displaying the same information and so are redundant.

For the record my set of indicators are:

* 4 Simple Moving Averages

* Bollinger Bands

* MACD

* Stochastics

But the way I use them is quite special, to learn more about how to become an expert at technical analysis visit:

Top Dog Trading Review

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Statistics show that in a bull market about 75% of the stocks will follow the general trend and go up, and in a bear market 75% will also go down. Trading with the trend is the best way to trade as 8 out of 12 stocks will follow the trend and give you the best chance of making gains on your stock purchases.

But what if you own some good stocks and don’t want to sell when the market is clearly going down, or about to go down?. There are a few tactics that you can consider, both of which involve the use of options, CALL options and PUT options. There is the widely known strategy called Covered Calls, and the much lesser known one called the Married Put.

If you are going to trade options it is important that before you start trading you get the best option trading education that you can. You should also practice stock trading until you are comfortable with the process. This is a very important point that must be taken seriously, if you don’t understand the terminology and the theory then you should not be trading options. If the terms Put option, Call option, Married Put and Covered Call are new to you then don’t trade until you have studied sufficiently.

Selling call options against your stock in 100 share increments is the basis of the covered call strategy and it can provide about a 2-7% buffer against the loss in stock price. However a bigger drop in the stock price will not be compensated for using the covered call strategy, in general.

Stocks in a bear market, and even in a bull market, can drop quickly on news or earnings releases, as much as 15 to 40% within a month. Using covered calls to protect your stocks will only provide limited protection of less than 7% at best and so will not save your account if the stock takes a 40% tumble.

The better solution to providing downside stock protection is the option strategy called the Married Put. As the name suggests the PUT that you buy is used to provide protection when the stock goes down because Put options will increase in value when the stock decreases in value. The term married is used because the option that is selected has to be very compatible with the stock, in other words a good match, if the strategy is to work.

The selection of the best Put option is not easy and involves several criteria which are listed below:

1. The strike price of the option

2. The current share price

3. Choice of options, in or out-of-the-money

4. Put expiration time

Even though the married Put protection only has a short life span if offers much more protection than the covered call. It can provide as much as 90-95% loss recovery in the event of a significant drop in the stock price.

The downside of the good protection is that you have buy the Put which is a cash debit whereas the covered call is a credit. But there are ways of off-setting this expense and there is much more to this strategy when executed correctly. The Married Put can be made to just about pay for itself and used to generate very good gains if the market, or stock to be specific, moves a lot.

The general idea of the Collar Trade is to combine the covered call and married Put strategy into one, this is what is called the Collar Trade. In effect you put a collar around the stock, sell a call and buy a PUT. If you do this correctly most of the cost of the Put can be offset by the credit from the covered call so you can protect your valuable stock at almost no cost. Yes this is a great strategy which the general public is unfortunately very ignorant of, and most brokers don’t understand.

The strategy that I have outlined above is unknown to the average stock market trader but is one of the best trading systems you could have.

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I must begin by pointing out that there actually is no system for investing that is fully without risk. That being said, mutual funds have lower risks that a number of other investment alternatives, which makes them an attractive bargain for those that are unsure about investing. In fact, for the reason of savings, mutual funds often have lots of better rates of refund than the average savings account at your local bank & the risks are minimal in this kind of investment, specially compared to other riskier ventures.

Therefore back to essentials, mutual funds are, easily put, a collection of stocks & bonds that are owned by a group of people rather than one personal investor. This accomplishes a few things. First of every, it provides investors to purchase in by considerably low money than it will take to purchase the similar ‘portfolio’ on their own & it spreads the damage out among a group of people should something go wrong. In addition, because it is not one single stock or bond or majority of even though one sector of the stock market, the risks for a complete & total loss are reduced to some degree. Remain in mind on the other hand that the market does simply have bad days on event and there’s little that could be done about that short of stuffing your money under your mattress & it certainly won’t grow there.

There are plenty of advantages and disadvantages in regards to buying mutual funds. You won’t discover the flashy swings, dips, dives, & other grand maneuvers in the typical mutual funds. Lots of mutual funds are selected because of their stability not for in hopes of massive profits though several mutual funds are, admittedly, extra aggressive than others. It actually depends on how much of a gambler you’re with nature & how lots of of your investment & retirement you’re willing to risk as or not you will be satisfied with mutual funds whether part or all of your investment portfolio.

Diversification is one of the key ingredients of a healthy portfolio and mutual funds will assistance you work the diversity you need into your portfolio in short order. Wheter you are young & just beginning your occupation and in no real hurry for retirement this’s one of the safest tips to invest your money for the long haul. Sadly it may lead to a comfortable retirement but is unlikely to lead to a flashy retirement, whether lots of mutual funds don’t have the good payoffs that several investors aim.

There are mainly three kinds of mutual funds through several variations on every. First there are money market funds. These funds are good for the long-term investor who has a slow and steady approach to investing and would majority of be better than leaving your money in a savings account collecting interest but there are greater earning funds to be found. Second are the equity funds. These funds give slow progress over time as well whether some income along the track. Lastly there are the fixed income funds. The reason of these funds is to give a current income over time. These aren’t funds that are anticipated to rise in value just to remain a particular regular of living. This is excellent for those who have retired or investors that are very conservative in nature. Hopefully this finds you knowing a little more about mutual funds in general & preparing to study although extra about how to overcome your investment alternatives and create these key decisions for your future & that of your family. Read more other FREE articles about military auto insurance, viking auto insurance and auto insurance lead

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From the BusinessInsider:

==============================

YouTube cannot maintain its current course and remain a going concern. Google can continue to fund the experiment for a period of time, but at some juncture, shareholders will ask hard questions about why Google is sacrificing half a billion dollars to support a project whose chances of providing a return, at any point, is dubious at best.

Advertising cannot solve the problem, at least not in its current form, and not in the near term. With a diminishing field of options, a massive, growing, cost center, and an economy in recession, Google will need to make some hard decisions about the future viability and business model of its prodigal child.
=========================

For the full story go to BusinessInsider.

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Once you have fully explored that first point of interest, make sure that the stock is priced low and ready to go higher. Should you start to think that buying undervalued stocks means learning about buying penny stocks then you are way off base. Basically, knowing how to pick stocks would be the same as buying stocks cheaply.

What are cheap stocks then? Buying cheap stocks means purchasing them when they are trading below face value. Being able to locate and purchase these cheap stocks is what makes the pros so wealthy.

How would you go about figuring out if a stock is cheap? The number one thing to look for is a sector that is not performing like it should or will do better in the very near future. Compare the PE multiples of your stock with that of it’s competitors. Should the stock look like a winner and the price appear like it will rise, then you have on your hands an under priced stock. If you really believe the stock is under priced then you should think about buying it.

Will this prevent you from having to learn how to successfully trade mutual funds? You should already know the answer is no. Denying yourself the option of learning other ways to invest would be extremely foolish. If you don’t look at mutual funds you might as well not look at investing at all. You might regret not taking the opportunity to learn it. Mutual funds could be the best way to make your investments grow over a very long time. You would not want to be one of the destitute and regretful would you?

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After the close today, Alcoa (AA, Fortune 500) reported a first-quarter loss of 59 cents per share, wider than expected, after earning 44 cents a year earlier. First quarter 2009 earnings season gained the attention of investors today as the Dow Jones industrial average (INDU) lost 186 points, or 2.3%. The S&P 500 (SPX) index dipped 20 points, or 2.4%. The Nasdaq composite (COMP) fell 45 points, or 2.8%.

First quarter earnings are expected to be dismal for most companies and if the Alcoa earnings are any indication they surely will be. After a record 21% surge in the Dow averages during March off the lows of this bear market many investors large and small, market cheerleaders, and traders became far more bullish on the market. Some were even heard to say the THE bottom had been reached.

Ahhhh, if only it were that easy. It will be interesting to see what these same investors have to say after a big bank or two, you know the ones that are “too big to fail”, are nationalised. Eventually Mr. Bear will insist that the ugly truth be revealed; that the banks are insolvent, that the next energy spike is all but assured, that higher energy prices will be devastating, and that the ground has shifted beneath us.

There will be no going back to “normal”, no matter how many investors and silly talking heads still irrationally think it so. Unless we take steps now to downsize as a society and learn to live within our means we will soon enough face extreme hardships of the sort not seen in America in the past 150 years.

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The biggest Google expense for YouTube is the incredible amount of bandwidth that it must pay for. Despite estimating that YouTube pays about half the lowest market rate for bandwidth, the cost of streaming 5 million videos a month is considerable. Analysts place bandwidth costs associated with YouTube at about $360 million a year, or almost $1 million a day.

Google has recently started to rein in some of it experimental projects as well as some of its famous employee benefits. This is not surprising as the “do no evil” company does have the smarts to realize that the economic crisis is beginning to affect just about every company, no matter the size of operations. In the past Google could depend upon the growth of the Internet and its powerful advertising revenues to power up earnings so it didn’t seem all that concerned about balloning expenses for new projects from Google Labs and paying for employees lunchs at its cafeterea.

The new reality is that the economic downturn is being felt, even at Google. And that YouTube, once considered a prize acquistation is now being looked upon as an earnings killer.

Credit Suisse analysts estimate that YouTube will bring in about $240 million in revenue in 2009, which will come mostly from homepage placement ads and in-video overlays and adjacencies. On the cost side, Credit Suisse estimates that Google spends $711 million in operating expenses related to YouTube. Those costs include bandwidth, content acquisition, partner revenue shares, site overhead, and storage.

A nearly half a billion dollar mismatch of revenues vs expenses is a burden that even mighty Google may find troubling as the world economy slides further into depression. As Google is now a mature company the high net income growth days seem to be over, at least until Google can consolidatate and improve the earning potential of its holdings, especially YouTube.

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The Dow Jones averages ended the week at 8,017.59, with a gain on the day of +39.51 (+0.50%). This is the fourth week in a row that the Dow has put in a positive weekly performance. For the month March was terrific for the bulls and stock cheerleaders. In fact the monthly performance was the best in 80 years.

So does all of this great news about performance and especially a recovery in the financial sector mean that happy days are here once again? Well, yes and no. If you had purchased say Citigroup back in the heyday of 2007 at a price of $50.00 a share you might not be too thrilled to see the stock rally all the way back to Friday’s close of $2.85. However, if you had been brave enough to pile into the stock when it reached true penny stock status a few weeks ago at $0.99 you might be thinking that you are a pretty smart fellow.

Some analysis think that the market’s ability to throw off bad news, like Friday’s dismal unemployment report, is a sign of a new bull market starting to strut its’ stuff. Climbing a wall of worry and all of that. Then world leaders just concluded a G20 meeting at which they more or less agreed that the way to solve the financial system’s problems of too much debt and too much leverage is by creating even more debt. Go figure. A trillion here, a trillion there and something should eventually happen. But Mr. Market liked the word trillion for the week, said “what wall of worry” to close above the 8,000 level.

The real factor that got the financial sector on fire for the week, however and sadly, was the change in mark to market accounting principals by the FASB to mark to model. The bankers have been pushing for this change for some time as it will allow them to keep worthless and near worthless toxic assets on their books at their model price. Naturally the bankers model will show prices made up in dreamland. Assets that maybe would bring a price of $0.30 on the dollar can be held on the bank’s books at say $0.80 on the dollar. Happy days. The banks are not going to have to take such drastic write downs after all.

The market will probably go along with this journey into la la land for some time yet. I would not be surprised to see a rally into late Spring, early Summer. However , I for one consider this as a perfectly normal bear market rally. The next leg down will be a crusher as all of the suckers who thought that the worse was over finds that the really bad part is just beginning.

With the housing market still in a state of vigorous decline and the commercial real estate market starting to crumble the short term to mid term outlook for the financial sector is grim. Then there is the rising tide of credit card debt defaults but we will leave that for another day.

Don’t forget to sell this rally. Financials are rallying on false premises. Many will not survive until the end of 2009 as further loan losses kick in. Capital will be destroyed faster than even the super charged Bernanke lead Fed can replace it.

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