If you’ve been trading for any time at all, you know the alure of trading penny stocks.  Indeed, the skilled trader CAN make a lot of money when he/she gets in at the right time.  But the article below shows just how dangerous this approach can be:

Sep 26, 2011 (SmarTrend(R) Spotlight via COMTEX) — Uranium Resources (NASDAQ:URRE) is one of today’s worst performing penny stocks, down 4.7% to $0.72 on 0.2x average daily volume. Approximately 238,000 shares have traded hands today vs. 30-day average volume of 1.3 million shares.

High volume often signals a change in trends. Shares of Uranium Resources are currently trading below their 50-day moving average (MA) of $1.23 and below their 200-day MA of $2.05.

SmarTrend scans for speculative penny stocks under $1 for reversals in trends. A large price movement may signal continuation or reversal of a trend.

Uranium Resources is in SmarTrend’s Industrial Metals & Minerals industry and this industry is currently in a Downtrend. An industry trend that matches the stock’s trend helps to add conviction to the stock’s Downtrend and price prediction.

SmarTrend currently has shares of Uranium Resources in a Downtrend and issued the Downtrend alert on May 23, 2011 at $1.55. The stock has fallen 51.1% since the Downtrend alert was issued.

Write to Chip Brian at

Read original article here

As always, regardless of whether you are trading penny stocks or ‘real’ stocks, have a real plan and size your positions appropriately!



Monday, September 26th, 2011 News, Stock Trading No Comments

Entitlement Cuts Needed, But Who Has Guts to Do It?

Published: Wednesday, 14 Sep 2011 | 12:59 PM ET
By: Jeff Cox Senior Writer



Jon Corzine left government reluctantly, but there’s at least one reason why he doesn’t mind being out of office.
Dealing with the current federal debt[cnbc explains] and deficit problems, he said, is a job someone else can have.

That’s because he and fellow panelists gathered at the Delivering Alpha conference Wednesday agreed that controlling costs of large-scale entitlement programs such as Medicare and Medicaid are at the core of getting spending under control.

For those uninitiated in the way of U.S. politics, those programs are considered the proverbial third rails—touch them and you die.

“Entitlements absolutely have to be addressed in a way that I would have been uncomfortable talking about as an elected official,” said Corzine, the former New Jersey governor and U.S. senator. Republican Chris Christie defeated Corzine in the 2009 gubernatorial race.

The remark was telling during a lively debate over just what policymakers can do to address the U.S. spending issues. The federal budget deficit is approaching $1.5 trillion and the national debt is $14.5 trillion and growing.

Despite agreement that the issue must be addressed, reaching consensus on how to go about it is a difficult exercise. The problem is that cutting off spending could stymie growth, but allowing the debts and deficits to continue to balloon unabated pose what could be an even greater threat to national economic stability, as resources are diverted towards paying foreign creditors.

“There’s no question that in order for us to do right, we’re going to undergo less growth than we hoped for and less growth than a lot of people expect,” said Thomas F. Steyer, senior managing member at Farallon Capital Management. “Do I think it’s going to affect the way I am investing and the ways I think about the future? Yes, I do.”

Yet the notion that Washington will take away benefits from its big-ticket entitlements is troubling to some at at time of economic malaise.

As such, the populist battle to preserve the social compact against the practical realities of fiscal management continues to rage.

“This is a conversation about the responsibility of America’s elite. America’s elite is on this panel and gathered in this room. Exactly what level of responsibility do you people take to the rest of the people in this country?” said Damon Silvers, director of policy and special counsel for the AFL-CIO. “By cutting off the health care to poor, elderly Americans, think about what the public response to you might look like over the next generation.”

But Emil W. Henry Jr., former assistant Treasury secretary and CEO at Henry, Tiger, said the U.S. needs political change to take on difficult issues that are being ignored by the Obama administration.

He cited a speech earlier in the day from current Treasury Secretary Timothy Geithner as being evasive on what the White House will to do foster economic growth.

“Growth is the answer. I think (Geithner) gave lip service to growth,” Henry said. “I haven’t seen a single growth policy out of this administration.”

Ultimately, according to Corzine, who currently runs MF Global, resolving the issues may fall to those who are willing to sacrifice their political future.

“Politics is not going to go away,” he said. “People have to be willing to lose to have society win.”

Wednesday, September 14th, 2011 Education, News 1 Comment

Hand It Over: Regulators Ask Firms for Trading Secrets

Published: Friday, 2 Sep 2011 | 11:25 AM ET


U.S. securities regulators have taken the unprecedented step of asking high-frequency trading firms to hand over the details of their trading strategies, and in some cases, their secret computer codes.

NYSE trader
Getty Images

The requests for proprietary code and algorithm parameters by the Financial Industry Regulatory Authority (FINRA), a Wall Street brokerage regulator, are part of investigations into suspicious market activity, said Tom Gira, executive vice president of FINRA’s market regulation unit.

“It’s not a fishing expedition or educational exercise. It’s because there’s something that’s troubling us in the marketplace,” he said in an interview.

The Securities and Exchange Commission, meanwhile, has also begun making requests for proprietary algorithmic trading data as part of its authority to examine financial firms for compliance with U.S. regulations, according to agency officials and outside lawyers.

The requests by SEC examiners are not necessarily related to any suspicions of specific wrong-doing, although the decision to ask for it can be triggered by a tip, complaint or referral.

According to interviews with attorneys, traders, industry executives and regulators, the unusual requests for algo code and other computerized trading strategies really ramped up this year and have targeted stock-trading firms such as broker dealers and hedge funds.

It has alarmed some traders who are afraid their “secret sauce”—intellectual property sometimes developed over years and at great cost—could get into the wrong hands, especially when SEC and FINRA examiners leave for the private sector.

“I’d be disappointed and upset” if they asked for code, said a high-frequency trading firm executive who declined to be named. “I mean, are these people all going to work at the SEC forever?”

The SEC’s new focus on algo strategies will likely help inform any new structural rules the government agency applies to an electronic market, criticized by some as unstable or unfair, especially after the “flash crash” on May 6, 2010.

While anything the regulators find could lead to legal action such as market manipulation suits, FINRA’s effort appears more targeted at wrong-doing.

FINRA, which reports to the SEC, usually focuses its requests on flawed codes in an effort to better understand how they are constructed, operate, and how they are supervised, Gira said. An unusually large wave of orders for a lightly traded stock, for example, could lead to a request, he said.

“The Next Level”

Trading code is a high-stakes secret for high-frequency firms that battle each other to earn razor-thin profits on tiny price imbalances in the market. Such firms can make thousands of trades per second and provide much liquidity to the market.

High-frequency trading is estimated to be involved in more than half of all U.S. stock trading. Regulators have said the algos behind such trading were a factor in the flash crash, but that they did not cause it.

Carlo di Florio, who heads the SEC’s Office of Compliance, Inspections and Examinations, said the agency started asking firms for proprietary algorithmic trading data over a year ago, and has since more broadly incorporated such requests into its risk-based exams.

Friday, September 2nd, 2011 News, Stock Trading No Comments

Employers add no net jobs in Aug.; rate unchanged

Christopher S. Rugaber, AP Economics Writer, On Friday September 2, 2011, 9:18 am

WASHINGTON (AP) — Employers stopped adding jobs in August, an alarming setback for an economy that has struggled to grow and might be at risk of another recession.

It was the weakest jobs report since September 2010. The unemployment rate remained at 9.1 percent.

Stock futures plunged on the news. Dow futures fell nearly 100 points shortly before the market opened.

A strike by 45,000 Verizon workers lowered the job totals. Those workers are now back on the job.

The weakness in employment was underscored by revisions to the jobs data for June and July. Collectively, those figures were lowered to show 58,000 fewer jobs added. The downward revisions were all in government jobs.

The average work week also declined and hourly earnings fell by 3 cents to $23.09.

Weak growth, Standard & Poor’s downgrade of long-term U.S. debt in early August and a sell-off on Wall Street likely kept some businesses from hiring.

With job creation stalled and wages declining, consumers won’t see much gain in incomes. That will limit their ability to spend, which undercuts growth. Consumer spending accounts for about 70 percent of the economy.

“The stagnation in US payroll employment is an ominous sign,” said Paul Ashworth, an economist at Capital Economics. “The broad message is that even if the US economy doesn’t start to contract again, any expansion is going to be very, very modest and fall well short of what would be needed to drive the still elevated unemployment rate lower.”

The economy needs to add roughly 250,000 jobs a month to rapidly bring down the unemployment rate, which has been above 9 percent in all but two months since May 2009.

In August, the private sector added 17,000 jobs, the fewest since February 2010. That compares with 156,000 in July and 75,000 in June.

Hiring fell across many different sectors. Manufacturers cut 3,000 jobs, its first decline since October 2010. Construction companies, retailers, and transportation firms also cut workers.

The health care industry added 30,000 jobs last month.

The economy expanded at an annual pace of only 0.7 percent in the first six months of the year. That was the slowest six months of growth since the recession officially ended in June 2009.

In August, consumer confidence fell to its lowest level since April 2009, according to the Conference Board.

Most economists forecast that growth may improve to about a 2 percent annual rate in the July-September quarter. But that’s not fast enough to generate many jobs.

The Obama administration has estimated that unemployment will average about 9 percent next year, when President Barack Obama will run for re-election. The rate was 7.8 percent when Obama took office.

The White House Office of Management and Budget projects overall growth of only 1.7 percent this year.

Next week, Obama will deliver a rare address to a joint session of Congress to introduce a plan for creating jobs and boosting economic growth.

Friday, September 2nd, 2011 News No Comments

ETF Trading with Larry Connors: Stocks Rally on Light Volume Ahead of Holiday

By Larry Connors | | September 01, 2011 08:58 AM

Every liquid Country Fund ETF has a 2-period RSI reading above 70 today, with nearly half the universe showing readings above 90. As I mentioned yesterday, this could go on for a few more days (especially with the lightened volume due to the upcoming 3-day weekend) but a pullback is more than due and likely coming very soon.

The above is from Larry Connors’ Daily Battle Plan.

To learn more about the Daily Battle Plan – including access to Larry’s daily ETF trading signals, click here for more information.

And for more on ETF trading, be sure to visit us here to check out the book that Stocks, Futures and Options (SFO) Magazine called one of the best trading books of 2009: High Probability ETF Trading: 7 Professional Strategies to Improve Your ETF Trading.

Larry Connors is founder and CEO of

Thursday, September 1st, 2011 Larry Connors, News, Stock Trading No Comments

Private sector adds 91,000 jobs in August: ADP

On Wednesday August 31, 2011, 8:45 am

NEW YORK (Reuters) – The pace of U.S. private sector job growth slowed in August for the second month in a row with employers adding 91,000 positions, a report by a payrolls processor showed on Wednesday.

Economists surveyed by Reuters had forecast the report would show a gain of 100,000 jobs. July’s private payrolls were revised down to an increase of 109,000 from the previously reported 114,000.

The report is jointly developed with Macroeconomic Advisers LLC.

The ADP figures come ahead of the government’s much more comprehensive labor market report on Friday, which includes both public and private sector employment and is forecast to show the economy added 75,000 jobs in August.

(Reporting by Leah Schnurr; Editing by Padraic Cassidy)

Wednesday, August 31st, 2011 News No Comments