How to Generate Income from Your Stocks

June 4, 2010 // 52 minutes

The Market Guys will show you how you may be able to create income from your stocks with options.

Investing Education Day

July 29, 2010 // Chicago, IL

PIN PRESSURE INDICATOR™

Using Pin Pressure as a leading indicator for setting price targets

AJ Monte, Chief Market Strategist for the Market Guys, has written a paper for the Market Technicians Association on the Topic of Pin Pressure.

This document was grounded in research conducted by the University of Illinois showing how Option Trading Volume affected the price of the underlying stock in which the option contracts where traded.

From this paper, AJ has developed the Pin Pressure Indicator™ which is a calculation that computes the combined open interest traded at various strike prices and uses this data to determine price targets for individual stocks as we approach options expiration Friday.

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0 Q & A from “Combining Technical and Fundamental Analysis” Webinar

Great news!  You can watch the January 29th webinar anytime – CLICK HERE!

Q: In your opinion, which technical tool/parameter is the best forecaster of short term price movement? – Tom

A:  we always say that price is the forgotten leading indicator.  We start with price and volume.  Look for the story – what patterns are forming, how strong is volume, how long are the candles, etc.  Beyond that, use the simple indicators such as simple moving average (SMA) and trends lines.  Always keep in mind that technical analysis is first and foremost a risk management tool, not a forecasting tool.

 Q: Does fundamental screening play a larger role when screening on a longer price movement forecasting? – Sanjay

A:  Yes, fundamental analysis becomes more important as your time horizon gets longer.  Technical analysis is always important – even for the investor.  A long-term investor can use monthly and weekly charts to manage positions very effectively.  However, a short-term trader may not use any fundamental analysis.  Swing traders through investors should employ a mix of the two.

Q: How much can you really pay attention to Fundamentals when they can be manipulated by people… whereas Technical’s cannot? – Deb

A:  That’s a good point that you can’t ignore.  People can make up stories for the financial reports but they’ll always tell the truth withtheir wallets.  Fundamental analysis is what people are saying; technical analysis is what people are doing.  Furthermore, financial reports are a month to a quarter old by the time you see them.  Technical data is real-time – you get to see the trades as they happen without delay.