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DAILY STOCK MARKET FORECAST

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Market Outlook is a recap of the current and future condition of the U.S. stock market.

Indicates short-term U.S. equity market (S&P 500) forecast.

Indicates the strength of the forecast; it's a forecast bias, not a daily market bias.

Indicates long-term U.S. equity market (S&P 500) forecast.

Extended Forecast is a seven week forecast of the U.S. stock market.

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Economy added 211,000 jobs.

Unemployment Rate 4.4 percent.

GDP +1.2 percent.

GDP chart 1987 to 2017.

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How to Invest in the U.S. Stock Market

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Getting Started.

This section is for beginners in the stock market.

It will describe some of the ways that you can use to invest or trade.  If you don't know if you want to invest or trade, go to Before You Invest section before continuing here.

This assumes you have the money somewhere, and all you need now is the how to:

In order to be successful in investing/trading you need to decide if you or someone else is going to do the managing of the account. That is, do you want to handle the research, buying and selling of the stocks and funds or do you want someone else to do that for you.

Whether you do it yourself or not you still need to setup an account with either a fee-only Financial Planner or a Securities Brokerage House.  At this time, this site does not recommend Financial Planners or brokerages.  You can search the Internet using these words 'financial planner' and 'stock broker' to find the appropriate party.  To learn more on how to invest in the stock market for beginners, go to the How to invest, 101 for beginners.

 

 

 

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Buy Stocks Direct from Companies

Some companies have adopted the Direct Stock Plan (DSP) which allows individuals to buy and sell shares directly through the company, bypassing brokerage firms and their fees. In many cases you can have the dividends you receive from the company automatically reinvested into more shares through a Dividend Reinvestment Plan (DRIP).

Direct Stock Plans (DSP):

Some companies allow you to purchase and sell stock directly through them without having to pay commissions to a broker, although you may have to pay a small fee for this service.

Some companies require that you already own stock (at least one share) in the company or are employed by the company before you can participate in their DSP. You may be able to buy stock by investing fractional dollar amounts rather than having to pay for an entire share. In some cases you could have an account debited on a regular basis to make investments in the plan. Some plans require a minimum amount of investment or require you to maintain specific minimums in your account.

Each company that has DSP will explain on their website all the requirements and what amount they charge for the service- the fee charged is usually a fraction of the cost a broker would charge. 

DSP plans will not allow you to buy or sell your securities at a specific price- they batch transactions and buy and sell shares at established periods- weekly or monthly and normally at an average market price.

Dividend Reinvestment Plans (DRIP): Dividend reinvestment plans let you take advantage of reinvesting your dividend back into shares of the company instead of receiving cash.

The rules and restrictions in these plans vary depending on the kind of plan and the company offering the plan. Before you decide on DSP, read the company's disclosure information (prospectus)  to learn how its particular plan works. The plan will tell you how to enroll, the number of shares needed to open an account, any charges that may apply, and the minimum or maximum you can buy or sell, the dates when you can invest, and how to withdraw, transfer, or sell your shares.

Most of the companies that have DSP have Internet sites that can provide you with information about their plans or tell you who to contact for more information. Some companies have assigned their transfer agent to administer the DSP.

There are literally hundreds of well known companies that have DSP and DRIP investing plans that will allow the individual investor to acquire their stock and to reinvest dividends.

With a little research on your part, you can find these companies on the Internet by searching for: direct stock purchase plans investor relations.

DSP is a great way to invest in NYSE and NASDAQ companies and save on transaction fees...    

Related:

Buy stocks directly from companies

 

 

How can I make money in this environment

That's a question a lot of people ask today. You can make money in the stock market even when the market is selling-off. It's what you buy. Stocks that do great when the rest of the market is down are stocks that counter the market. There are sectors in the market that tend to do well during market downturns. It can be difficult to find those stocks and even if you do there are no guarantees that they will continue to go up. These stocks sometimes will do great while the general market is down but once the market turns-around and goes up these stocks can go down. There are no perfect stocks. 

Unless your into stock research ( and this doesn't always work, i.e.., Enron) you may want to get advice from a trusted source. There are some trustworthy sources out there that can be used to determine what stocks to trade or to invest in. Once you decide on stocks or even funds that you want to buy, wait and buy when the market is favorable. I know the argument of timing the market, and also know the argument on dollar-cost averaging, but let's face it, who wants to buy a stock at 20 just to see it sell-off to 10. There has to be a better way.

That's where the Barometer comes in. By looking at the Barometer you can tell where the market is and where it came from. It cannot forecast the market and tell you absolutely where it is going but it can tell you where it is likely to go. Check it out- see for yourself. Also the Market Memo is a memo about the likelihood of the market being in a negative, positive, or neutral environment.

 

 
Stock Market Timing- BUY/SELL/HOLD

HOW TO TELL WHEN TO BUY AND SELL

Is this a good time to buy, sell, or hold stocks and funds? Historically the chance that the market will turnaround and reverse direction are pretty good. The market never goes straight up or down, it goes in cycles and the length of the reversals are not always even. That is, markets do not normally go up and down in even numbers. They don't go up 5 days turnaround and go down 5 days. The length and direction (up or down) tells you if the market is positive or is in a negative state. Here's an example. If the market is positive and generally advances for 5 days and reverses direction and goes down for several weeks, you might come to the conclusion that the market is in a negative environment. Basically, that’s how you decide the market environment, by those ups and downs and the length of the direction it goes (the number of days).

Investors are not able to rely on stock market analysts anymore because it is almost impossible to know what the analyst's agenda is and whom he/she really works for. Would your trust them with you money? Investors have the same questions as they have always had. Is this a good time to buy? Are we at the bottom? Will the market go down anymore? Are we at the top? Is this a good stock or fund? You have to understand the market environment and you must know the company you are willing to commit money to. Same thing with funds, you must know the fund management team and understand what it is they invest in.

I could point out many reasons that this isn't a good time to begin or continue buying stocks. However, there are always stocks to buy, even when the market is tanking you can find those nifty handful of stocks that will disregard what the broader market is doing and forge ahead. The trick is to identify them. That's not easy. Professionals buy and sell all day long and by judging their performance, they too have problems managing their portfolios. In fact, just look at the record of those fund managers from 2001 to 2002.

SO WHAT DO YOU DO

Begin by determining the mood of the market. The market in 2001-2002 was a tangled mess that you didn't think would ever recover. If the economy didn't convince you things were tough, then how about all the companies that falsified the accounting books (Enron, Worldcom, etc.). Not to mention terrorist attacks and the like. Turmoil in the world never seems to get better, it seems to get worse. How much more bad news can there be, you ask?

Always remember the stock market is foreword looking. It really doesn’t care about the present, although it does react to daily news. For the most part the market looks to the future, maybe 6 to 9 months, and determines if now would be a good time to buy/sell or hold based on where the market thinks the market will be in the future.

MARKET TURNAROUND

Look for a turnaround in the market when you least expect it. When the news becomes unbearable and you think that it will never get any better, always remember that the market at some point will began discounting present-day bad news because the market at some point will focus on the future. During this initial phase of a bear market turnaround you will begin hearing that CEO's are seeing a little more light at the end of the tunnel and expect that next quarter may be better. Also listen for company buy-back news. Companies will begin buying shares of their own company in anticipation of a market bottom. The opposite is also true. Look for the market to decline especially after a major rally, when the news couldn’t get any better and you're exuberant, remember August 2000? Another key sign that normally occurs before a turnaround is when companies begin selling their own stock. Always remember the market most likely will go the opposite direction you would think it should. That's why most seasoned traders and investors will tell you to keep your emotions out of it. There are things you can do to decide for yourself if the market is close to a turnaround.

  1. Look for trend changes, like the Barometer shows you. The Barometer is a picture of the overall market and you can visually see if the market is negative or positive. You can even pick a market bottom and top by watching for trend changes.
  2. Another way is to put a ruler to a chart and pretty much see for yourself if the trend is down, moving sideways, going up, or breaking a trend. Chart the DOW and NASDAQ for a couple of months and see for yourself. You can chart FUNDS in the same manner.
  3. Listen to those reports from CNNfn and CNBC about company buy-backs and sells. If the company seems to want to acquire or sell their own stock, that has to tell you something. They didn't get rich by making mistakes or lagging behind.

ACTION PLAN

Make decisions based on a solid plan. Don't make rash emotional decision. When you develop your action plan, take these steps into consideration.

  1. Decide what kind of trader/investor you are. Determine why you are investing.
  2. Determine the total portfolio amount you want to start with. Make sure you won't need the money any time soon.
  3. Determine how you plan on picking stocks/funds that you're interested in. Will you use analyst recommendation and then check it out yourself? Will you pick stocks based on value? Company buyback news? Company's Dividend news? Popularity? What drives you to buy this particular stock? Above all, if after you have selected the stock you think you want to buy, make sure you know what the company does, what they make, and how they earn their money. If you cannot understand how they make money, stay away.
  4. Once you have an idea of what you want to buy, determine your entry strategy, how much you're willing to pay. You need to answer the following questions. Will you buy a stock based on analyst entry-point recommendation? Will you chart the stock and determine yourself based on MACD, Price-channel, or money flow? How much are you going to invest in this particular stock? (A rule of thumb might be no more than 10 percent of your total investment portfolio).
  5. The big one. Determine your exit strategy. Everybody has a problem with this one. Before you buy the stock, document the selling price. And when it gets to that price sell it. It may be you are a long-term investor. If that's the case you may not want to set an exit price but an exit date.
  6. Determine how much cash in the portfolio you want to maintain. Determine if you will add more cash each month or is this a closed portfolio. That is, you'll not add funds to the portfolio.

Last piece of advice. Have fun with it. Don't get emotional, but be levelheaded and follow your plan. Continue learning and modify your plan if need be. If you treat this as a business (meaning do everything you can to be successful like a business would) and you follow you planned strategy you'll be successful over the long run.

 

 
What causes stocks to move

Think about why you buy stocks and mutual fund. No one buys in hopes that when its sold it will be lower in price- a loss. Unless you need a tax loss, you most likely buy stocks and funds to make a profit. The more certain you are about a stock or a fund and its future, the more likely you are to buy it, if you're in the market to buy.

 

So the more certain you are about a particular stock or fund, the more likely you are to buy it. The opposite of certainty is uncertainty. The more uncertain you are, the less likely you are to buy.

 

Uncertainty doesn't have to be directly related with just the stock or a fund, but could have to do with the environment. Example. Lets say you're looking at fictional company 'XYZ',  and XYZ, has in the past, grown 50 percent a year and is projected to continue that growth. Also assume that the market for XYZ products are very good- you might buy some of the stock.

 

Let's say you complete your research on XYZ and a CNBC breaking news headline grabs your attention that says certain overseas countries are talking about building  their own XYZ plant. Now they may or may not build that plant, but at this point there is some uncertainty.

 

Throw in to the mix- Rumors that war is about to break out in another country that heavily imports XYZ products, and now you have another uncertainty. The uncertainty can be just about anything that could impact the companies stock directly or indirectly.

 

That is the nature of being uncertain, you just don't know. That's why the market can fluctuate violently sometimes.

 

It's like getting sick. If you get sick you begin to feel bad. The worse sick you get the worse you feel. Once you begin to get better, you probably begin to feel better. Same thing with stocks. The worse it gets for a stock, sector, or the market, the more you stay away. Unless the uncertainty (sickness) is terminal (Enron), at some point- it gets better. The less uncertain (the better you feel) it gets, the better chance the stock, sector, the market will rise. At some point the stock, sector, market (after enough selling) will find a base of support from which prices rise, all other things equal. 

 

If you have lots of time on your hands, you can track all of this yourself and you can determine when it's time to get in- most likely it is when you don't want anything to do with that stock, or the sector, or the market- is when you should consider getting in.

 

 

 

 
 

   

 
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Last modified: 3/ 8/2017

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