In the big picture (not for investing purposes) an index is suppose to accurately represent "something." If it does, then it is doing its job and is "good."

In the case of investing, you must first ask what is your purpose. If you are trying to represent the US stock market, for example, you want something that is accurate in a meaningful way. The S&P 500 accurately represents "the US stock market" in terms of dollar value. Unlike the DOW, it captures the lions share of the dollar value of the US market on any given day.

On the other hand, if you want to measure "all" or the US market (not just the biggest piece) you will need to use something like the Russell 3000 (98% of the investable market).

Amid gloom and then rebounding on financial markets, the worries about banks and the optimism about the new Obama Administration in the US, the first of this year’s surveys of big global investor sentiment by Merrill Lynch, has shown some relative optimism.

The December survey saw a hint of this change when it reported that investor sentiment had stepped back from the brink of despair, but more than a third of investors wanted to see greater fiscal stimulus, according to Merrill Lynch’s Survey of Fund Managers for December.

“While 88 percent of the panel believes that the world economy is in recession, December’s survey contains evidence that the rate of deterioration is slowing.

“The net balance of investors who expect the global economy to worsen in the coming year has fallen to 36 percent, down from 60 percent in October.

“More than a quarter of respondents believe the economy will strengthen in 2009. Cash levels average 5.5 percent, up from 5.1 percent in November, the highest level since 2001. Furthermore, a widespread perception exists that stocks are cheap, both in absolute terms and relative to bonds.”

They seem to have got their wishes with the German government upping its support for the faltering economy to some 50 billion euros, the US pushing its stimulus package to some $US825 billion and more rate cuts by central banks, especially the European Central Bank at the start of January and more to start this week in New Zealand.

But there have been more bank bailouts in the US, UK, Ireland, Denmark, France and Germany, while we in Australia are in the processing of filling a gap in funding caused by the flight of foreign banks, such as Bank of America, HBOS and Royal Bank of Scotland.

“Now for January ML reports that global investor gloom has started to lift, with hopes of improving growth and inflation rather than deflation.”

“There is a lot of hope in China’s bounce back as well.

“Broad economic sentiment has improved sharply from the lows of late 2008.

“The Merrill Lynch Fund Manager Composite Indicator for Growth Expectations has climbed to 30 this month from 25 in December and a low of 17 in October. The proportion of fund managers who predict lower inflation has fallen to a net 64 percent from a net 82 percent in December.

“Accordingly, there is a growing conviction that interest rates will rise, with 35 percent of respondents who forecast long term rates to increase in the next 12 months, up from 10 percent in December. At the same time the average cash balance remains high at 5.3 percent, only marginally lower than December’s level of 5.5 percent.

“Investors are talking a more positive story, especially with regards to the U.S., but the fear factor remains,” said Gary Baker, Banc of America Securities-Merrill Lynch head of EMEA equity strategy.

“They have firepower to act, but are unconvinced by the modest recent equity rally, suggesting it is a bear market rally in both sentiment and markets. Global sector allocations remain resolutely defensive.”

ML said that cash positions in Europe are at their highest level since 2001, reflecting the high level of caution within the region. A total of 42% of regional respondents are overweight cash compared with 29% in December.

“The numbers reflect how, while global economic sentiment is lightening, European expectations remain under a cloud with investors embedded in defensive positions.

“Every respondent to the regional survey expects a European recession, up from 91 percent in December. Investors are worried that corporate profits will continue to disappoint.

“This distrust means the percentage of investors who believe that European equities are cheap has almost halved, falling to 22 percent in January from 40 percent in December.

“European investors are still dancing the two-step and are reluctant to try out any more adventurous moves,” said Karen Olney, Banc of America Securities-Merrill Lynch lead European equity strategist.

“Investors continue to rotate between expensive defensive sectors and beaten, but not broken, industrial cyclicals that hope to piggyback on any indication of infrastructure-related spending by governments reigniting economies.”

ML said investors are flocking to Food & Beverage and Pharmaceuticals.

It said two survey records have been broken. Food & Beverage has hit its highest overweight in the history of the survey (net 11% of fund managers overweight).

The gulf in sentiment between Banks and Healthcare sectors is also at a record high. A net 57% of European investors are underweight Banks while a net 46% are overweight Healthcare. “Pharmaceuticals are largely immune to the credit crunch and economic slowdown that has hit banks,” said Olney.

Sterling is viewed as undervalued for the first time in seven years.

In October, a net 58% of respondents viewed sterling as overvalued but this month a net 7% believe it is undervalued. Increasing numbers view both the euro and the yen as overvalued.

US equities have become less in favour with global investors. The net percentage of asset allocators overweight the US equity market fell from 25% in December to 7% in January.

“There has been a notable dip in the U.S. equity market’s popularity and emerging market equities have been the new-year beneficiary of rotation away from the U.S.,” said Michael Hartnett, Bank of America Securities-Merrill Lynch chief emerging markets equity strategist.

The number of investors underweight in global emerging markets has fallen to 7% in January, from 17% in December.

In spite of flows into emerging markets, investors retain caution over China.

The percentage of regional investors who expect the Chinese economy to improve has risen from 6%, but is still low at 10%. The proportion of respondents who expect Chinese growth to slow in the next 12 months has fallen to 70% from 79% in December.

“China remains the big global growth wildcard in 2009. Despite the announcement of huge fiscal stimulus packages in recent months, investors remain very sceptical about Chinese and Asian growth,” said Hartnett.

“Indeed, Japanese investors notably reduced their expectations for Japan’s growth to close to a record low.”

A total of 205 fund managers, managing a total of U.S. $597 billion, participated in the global survey from January 9 to January 15. A total of 167 managers, managing $US359 billion, participated in the regional surveys.

The survey was conducted by Bank of America Securities-Merrill Lynch Research with the help of market research company Taylor Nelson Sofres (TNS).

IMPORTANT: AIR reports about financial markets and investment products in the widest sense possible. The AIR website and all its contents is prepared for general information only, and as such, the specific needs, investment objectives or financial situation of any particular user have not been taken into consideration. Individuals should therefore talk with their financial planner or advisor before making any investment decisions.

Australasian Investment Review
http://www.articlesbase.com/finance-articles/big-global-investors-seem-to-be-a-bit-more-confident-740969.html

The meaning of cheap stock, that is, stocks that they are trading under 60 cents or below, are always enticing – because you put down a small amount of money for a potentially lucrative return. It also looks good because with your investment you are getting a lot more shares, or contracts for you amount invested.

However, for many investors, this scenario is just a pipe dream to buy that stock at 10 cents and see it go to $10. Does happen but not very often and it can be very costly. Sometimes they are cheap for a great reason, they are NO GOOD

So what are the downfalls to cheap stocks?

How can you identify if they are cheap These cheaper stocks can also be categorized by their market capitalisation (that is, the total number of shares multiplied by the price per share). Which is the total value of the company If a company’s market cap is less than $100 million, the company is considered a fairly small stock, or a “small cap stock”.

So is bigger better, or are small Fish sweeter, Will they grow? Historically, small cap stocks have outperformed large cap stocks in terms of returns. However this is not always the case and you have to remember the saying risk versus return. This isn’t because a lot of cheap, small companies are better investments than large companies, but because almost all big companies were small when they first sold stock. Everything normally starts out small. Microsoft started in a garage, and now they are one of the biggest company in the world. Most large companies are through growing or are just fighting for market share.

Money-hungry investors turn to small stocks to buy, because these stocks are cheap and it looks like the bigger companies have not much room to grow. Right? We all want to get rich from the stock market, otherwise we would not trade? True? Read the Fine Print- Be careful of ‘the cheap stock’

Traders and investors will often flock to internet chat rooms and talk up a cheap stock, saying they are going to find large amount resource, or they are doing a big deal with a big company. Why does this happen because people buy it and then want someone else to continue to buy it.

This is called “pumping and dumping” and it happens all the time. So make sure you are careful. As if this was true what is being said in the chat rooms, it would be inside trading. Illegal so make sure you do you own homework.

A stock that maybe trades only 5,000 shares a day is a good example of this type of scam and highly illegal. So do not fall into the trap. Otherwise you will lose your money. By pumping up the stock it creates the price to move higher for no good reason. This stock will soon be a DUD Trade. This Stock used to trade at $5 now its 50 cents. So that’s cheap? Wrong

Another thing to avoid is a stock that has dropped significantly in price. Just because a stock looks cheap doesn’t meant it’s going to return to glory and you’ll make yourself a big profit. The reason they fall is because something fundamental may have changed, they could have lost most of their revenue by losing a contract, or could be sued there are a host of reasons for this stock to fall.

You have to ask yourself why the stock fell in the first place? Those odds aren’t good that these stocks will rebound. The odds aren’t in your favour. Following the trend, remember trend is your friend.

BUT REMEMBER THEY CAN REBOUND..

Remember, however, that stocks that have crashed significantly usually continue in one direction: down. Look at the rest of the sector, see how they are performing. Something also to consider is make sure you do your research on finding a great broker, otherwise bad brokers can make you broker. They can be selling and promoting these stocks from time to time, why as they have clients that are losing money, which they want to help them make money. This can be the case when they have really big clients. We have researched these broker to find out who we believe is the best. To find out more find out from www.cfdfxreport.com or email support@cfdfxreport.com

singapore trader
http://www.articlesbase.com/investing-articles/investing-in-the-stock-market-that-cheap-stock-that-becomes-expensive-698578.html

BY.- http://www.PracticalDayTrading.com

We all know that in the stock market is always possible to watch certain stocks go up more than 50% within a few hours to days. This is especially true in the 4th quarter of the year where the buying frenzy starts in wall street.

The financial media constantly reports about momentum stocks that are achieving tremendous gains during the same day. And even when you can see online investors that make $3000 on a single trade, it is also not unusual to watch beginner stock investors lose a great deal of money because of a series of unwise decisions

The problem is that if you don’t know how to pick among stocks & how to properly approach them you could end up wasting dollars instead of making your wallet happy. You can’t just trade stocks like if you where gambling in Vegas or Atlantic City.

The first step in becoming a profitable trader is to start learning how to pick and trade stocks. There are many “ultimate” trading systems out there, but you need to test them in order to discover which ones help you the most. That’s part of your homework as a stock trader. Test several strategies and then test them again until you are able to produce consistent winnings.

Bogus stock trading software programs and complicated day trading systems that rely on a “boat load” of technical analysis indicators can confuse you and make you slow, and being slow when trading stocks can be as dangerous as not knowing what to do in the first place.

The worst thing that can happen to a beginner stock market trader is to get information overload. It’s better to go step by step, and test a practical trading strategy that can help you focus on simple ways to make money while picking SOLID hot stock trading opportunities once at a time.

In the end, stock trading is all about buying and selling according to your especific knowledge FILTER. Once you master and follow your proven filter parameters like a clock, you can expect to start making serious amounts of cash on a consistent basis.

Fortunately some websites on the internet can show you how to use effective and proven stock trading strategies. One of those sites that can show you how to take advantage of hot stocks using simple to understand and apply momentum trading strategies is http://www.PracticalDayTrading.com

Visit them today & discover how to profit in the stock market by picking hot stock trading opportunities in a realistic way every week.

Stock Trading Basics
http://www.articlesbase.com/software-articles/stock-trading-system-gt-day-traders-system-online-how-to-pick-stocks-that-go-up-in-2009-724313.html

When trading penny stocks, once you’ve had a big success, your first thought me be about cashing out in order to enjoy the fruits of your investment. Keep in mind however that taking all the money off the table in the middle of a good deal (such as buying a house or car) may not the best course of action. Of course these are the things you are hoping to buy with your earnings and if you let all of your money ride you risk loosing it all if the stock dives. So what’s an investor to do?

Savvy investors have developed a rather solid strategy of selling a portion (typically half once the stock has increased in value by 100%). This leaves you with the benefit of potential future increases while protecting the value of your initial investment.

If you’ve found another investment that you’re interested in you could take a one third approach. This means leaving one third where it is, cashing out a third, and investing a third in the other stock you are interested in. While each situation is different the method is solid and used by many successful investors, particularly those who invest in the volatile market of penny stocks.

While one big win often leaves you hungry for the taste of another, it may be a good idea to take some time off after a successful trade and before putting your gains back into the market. It is always better to be ruled by reason than emotion, particularly when dealing with money. Investing should be done with reason and rather boring instead of made as the result of emotions and a need for adrenaline.

Vegas has a term for players who are much more risky with their winnings than they tend to be with their own money. It’s called “playing with house money”. The reasoning on the part of the players is that this money wasn’t their money to begin with and it’s no big loss. These players are also often less upset once they’ve lost it all.

This mentality often takes over with stock market investing. Rather than seeing that money as theirs, investors see it as house money they can play with and are willing to take investments that they would have otherwise passed on in hopes of another big win. Rather than relying on the pain staking hours of research and agonizing over the decision to purchase for your last win, you invest foolishly and loose it all. Taking a little time in between investments is often a good strategy for keeping your head in the game and money in your pocket.

Cashing out after a big rush on a stock is also a good idea. Especially if you are confident in the potential of that stock, this allows you to sell your stock then buy back after the initial rush when prices have gone down. Most of the time you can buy it for far less than you sold it.

There’s only one thing that is worse than selling too early when investing in stocks and that is selling too late. Do not try to pick the absolute top and sell at that price. It is much better to sell on the way up, than on the way down and it is nearly impossible to predict at exactly which point stocks will peak. Have a cut off point, once you’ve reached that point and made an acceptable profit, then it’s time to sell. Don’t look back at what you didn’t make either, be content with you much you’ve made and move on to the next stock. If you begin obsessing over every penny you could have made, perhaps this is not the best investment option for you. If you can walk away clean you can enjoy the exhilaration of the greatest game on earth.

Christopher Smith
http://www.articlesbase.com/non-fiction-articles/penny-stock-winners-what-to-do-next-66776.html

BSE Sensex (9424.24) and Nifty (2874.80) closed 8.6% and 7.3% up respectively last week.Nifty put-call ratio was 1.21.Support for Sensex is at 9000 and Nifty at 2740.Resistance for Sensex is at 9860 and Nifty at 3000.Inflation was at 5.64 v/s 5.60 last week. Crude oil was at 42$.Markets soar up from oversold territory on the news of $819 billion stimulus package being passed by U.S.House of Representatives. L&T expressed their interest to buy Satyam to Government of India. Fiedility bought 1.71 Cr. shares of Satyam from the open market. IMF reduced the growth forecast of India to 5.1% from 6.3% in 2009 .Government announced the price cut of petrol and diesel by five Rs and two Rs. respectively. Reliance Industries got interim order from Bombay high court to sell KG Basin gas till final judgement which is expected by mid March. .Nifty 2700 put option added open interest. SAIL and RPL added open interest. SBI and HPCL shaded open interest. Huge position was build up at BHEL February put option strike price 1290 and L&T February call option strike price 680.

Tactics for Future Option players.

1)Hindalco(48.95) Lot Size-1759 Shares

Buy one call option of February strike price 50@3.85 Rs.

Sell one call option of February strike price 55@2.00 Rs.

Premium .Paid=3.85*1759=6772.15 Rs.

Premium Received=2*1759=3518.00 Rs.

Net Premium Paid=6772.15-3518=3254.15 Rs.

Maximum Profit=55-50=5*1759=8795-3254.15=5540.85 Rs.

Maximum Loss=3254.15 Rs.

Break-even=51.85 Rs.

2)Petronet(37.35) February future-Lot Size 2200 shares.

Buy one lot February future @37.35

Sell one call option of Februay strike price 40@1.90 Rs.

Premium Received=1.90*2200=4180.00 Rs.

Max Profit==40-37.35=2.65*2200=5830.00+4180.00=10010.00 Rs.

Max loss=Unlimited.

Trading Idea

1)MARUTI(568.30)Buy this stock in decline and trade.

2)BPCL(391.95)Buy this stock in decline and trade.

Trend of Major Stocks

STOCK TREND Days WeeklyTrend MonthlyTrend

BHEL.NS Bearish 2 Falling Rising

ICICIBANK.NS Bulllish 4 Rising Rising

INFOSYSTC.NS Bulllish 4 Rising Falling

ITC.NS Bulllish 4 Rising Rising

MARUTI.NS Bulllish 2 Rising Rising

SBIN.NS Bulllish 4 Rising Rising

TATASTEEL.NS Bulllish 3 Rising Rising

TCS.NS Bulllish 4 Rising Rising

Technical indicators of major Stocks

MFI=Money Flow Index

RSI=Relative Strength Index

ADX=Directional Momentum Index

STOCK CLOSE MFI-21 RSI-14 ADX-14

BHEL.NS 1320.8 46.85 44.43 12.26

ICICIBANK.NS 416.25 46.88 50.06 17.28

INFOSYSTC.NS 1306.65 69.32 61.52 22.13

ITC.NS 180.1 66.4 63.01 12.11

MARUTI.NS 568.30 75.86 55.16 20.07

SBIN.NS 1151 48.65 47.82 28.48

TATASTEEL.NS 184.6 57.04 43.03 21.96

TCS.NS 511.6 54.13 52.31 10.09

narendra nainani
http://www.articlesbase.com/investing-articles/bullet-advisory-indian-stocks-weekly-markets-soar-up-from-oversold-territory-on-short-covering-748322.html

By.- http://www.MomentumStockTrading.com

It’s no secret that online trading can be a very lucrative, yet highly competitive field, and the truth is that the stock market doesn’t care if you are an experienced or a beginner trader.

The rules and the opportunities are the same for everyone, so either you are going to make money when you pick a stock and make a trade or you are simply going to lose it in favor of the more seasoned ones.

It won’t matter if we are in a recession or we have a great economy. Gamblers and ignorants loose money consistently either way. While experienced and Profitable traders make money in good or bad times. The trick is to learn how to do it.

As a stock trader your homework is all about studying and testing different market strategies that can help you take advantage of stocks while at the same time protect your gains.

Just always keep in mind that a good strategy is simple and practical. Complicated stock systems will always make you slow in your decision making process or confuse you from the start.

A trader must always read as much as he can. There is simply no other way to prepare one self for this difficult yet incredibly rewarding activity, but to read and put into practice as much ideas as you can, at least by paper trading first.

The are a lot of books on the subject that pretend to help you, however many of them where written 6 or 8 years ago and that kind of makes them obsolete in this constantly changing field.

Fortunately there are some practical stock trading sites on the web where you can access proven trading strategies that are easy to implement. One of those sites is http://www.MomentumStockTrading.com

They focus on stock trading methodologies that can help you identify and take advantage of certain stocks with momentum, while limiting your risk.

Visit them today and improve your stock trading potential in 2009.

Day Trading System
http://www.articlesbase.com/strategic-planning-articles/hot-stock-tips-gt-hottest-stocks-going-up-hot-stock-market-tips-731322.html

most of the companies has HUGE losses, low sales and/or may be bogus and stock prices can be manipulated by insiders

that’s closer to gambling than investing