Steak: How to Turn Cheap “Choice” Steak into Gucci “Prime” Steak

http://steamykitchen.com/163-how-to-turn-cheap-choice-steaks-into-gucci-prime-steaks.html

ChartPatterns.com

http://www.chartpatterns.com/

Great site that not only has examples and tutorials on chart patterns (pennant, ascending triangles, etc.) but also a 'stock of the week' examples that outline what, and what to do with it.

Great chart below showing example of leveraged-ETF returns.

http://www.investopedia.com/articles/exchangetradedfunds/07/leveraged-etf.asp

Dissecting Leveraged ETF Returns

by Tristan Yates (Contact Author | Biography)

Leveraged exchange-traded funds are a relatively new and unfamiliar product to most investors, but they could be the ticket investors need to bring in increased returns.

These funds are designed to deliver a greater return than through holding regular long or short positions. In this article we explain what leveraged ETFs are, and how they work in both good and bad market conditions.

About Leveraged ETFs
Exchange-traded funds are traded on a stock exchange. They allow individual investors to benefit from economies of scale by spreading administration and transaction costs over a large number of investors.

Leveraged funds have been available since at least the early 1990s. The first leveraged ETFs were introduced in the summer of 2006, after undergoing almost three years of Securities And Exchange Commission (SEC) review. Leveraged ETFs mirror an index fund, but they use borrowed capital in addition to investor equity to provide a higher level of investment exposure. Typically, a leveraged ETF will maintain a $2 exposure to the index for every $1 of investor capital. The fund’s goal is to have future appreciation of the investments made with borrowed capital exceed the cost of the capital itself.

Maintaining Asset Value
The first investment funds that were listed on stock exchanges were called closed-end funds. Their problem was that pricing of the fund’s shares was set by supply and demand, and would often deviate from the value of the assets in the fund, or net asset value (NAV). This unpredictable pricing confused and deterred many would-be investors. (For more on closed-end funds, see Open Your Eyes To Closed-End Funds and Uncovering Closed-End Funds.)

ETFs solved this problem by allowing management to create and redeem shares as needed. This made the fund open-ended rather than closed-ended, and created an arbitrage opportunity for management that helps keep share prices in line with the underlying NAV. Because of this, even ETFs with very limited trading volume have share prices that are almost identical to their NAV.

Note: ETFs are almost always fully invested; the constant creation and redemption of shares does have the potential to increase transaction costs because the fund must resize its investment portfolio. These transaction costs are borne by all investors in the fund.

Index Exposure
Leveraged ETFs respond to share creation and redemption by increasing or reducing their exposure to the underlying index using derivatives. The derivatives most commonly used are index futures, equity swaps and index options.

The typical holdings of a leveraged index fund would be a large amount of cash invested in short-term securities, and a smaller but highly volatile portfolio of derivatives. The cash is used to meet any financial obligations that arise from losses on the derivatives.

There are also inverse-leveraged ETFs that sell the same derivatives short. These funds profit when the index declines and take losses when the index rises. (To learn more, see Can you short-sell ETFs? and our Short Selling Tutorial.)

Daily Rebalancing
Maintaining a constant leverage ratio, typically two-times the amount, is complex. Fluctuations in the price of the underlying index change the value of the fund’s assets, and this requires the fund to change the total amount of index exposure.

Example: Suppose a fund has $100 million of assets and $200 million of index exposure. The index rises 1% in the first day of trading, giving the firm $2 million in profits. (Assume no expenses in this example.) The fund now has $102 million of assets and must increase (in this case, double) its index exposure to $204 million. Maintaining a constant leverage ratio allows the fund to immediately reinvest trading gains. This constant adjustment, also known as rebalancing, is how the fund is able to provide double the exposure to the index at any point in time, even if the index has gained 50% or lost 50% recently. Without rebalancing, the fund’s leverage ratio would change every day and the fund’s returns, as compared to the underlying index, would be unpredictable.

In declining markets, however, rebalancing can be problematic. Reducing the index exposure allows the fund to survive a downturn and limits future losses, but also locks in trading losses and leaves the fund with a smaller asset base.

Example: Consider a week in which the index loses 1% every day for four days in a row, and then gains +4.1% on the fifth day, which allows it to recover all of its losses. How would a two-times leveraged ETF based on this index perform during this same period?

Day	Index Open	Index Close	Index Return	ETF Open	ETF Close	ETF Return
Monday	100.00	99.00	-1.00%	100.00	98.00	-2.00%
Tuesday	99.00	98.01	-1.00%	98.00	96.04	-2.00%
Wednesday	98.01	97.03	-1.00%	96.04	94.12	-2.00%
Thursday	97.03	96.06	-1.00%	94.12	92.24	-2.00%
Friday	96.06	100.00	+4.10%	92.24	99.80	+8.20%

By the end of the week, our index had returned to its starting point, but our leveraged ETF was still down slightly (0.2%). This is not a rounding error. It is a result of the proportionally smaller asset base in the leveraged fund, which requires a larger return, 8.42% in fact, to return to its original level.

This effect is small in this example, but can become significant over longer periods of time in very volatile markets. The larger the percentage drops are, the larger the differences will be.

Note: Simulating daily rebalancing is mathematically simple. All that needs to be done is to double the daily index return. What is considerably more complex is estimating the impact of fees on the daily returns of the portfolio, which we'll cover in the next section.

Performance and Fees
Suppose an investor analyzes monthly S&P 500 stock returns for the past three years and finds that the average monthly return is 0.9%, and the standard deviation of those returns is 2.0%.

Assuming that future returns conform to recent historical averages, the two-times leveraged ETF based upon this index will be expected to return twice the expected return with twice the expected volatility, (i.e. 1.8% monthly return with a 4% standard deviation). Most of this gain would come in the form of capital gains rather than dividends.

However, this 1.8% return is before fund expenses. Leveraged ETFs incur expenses in three categories: management, interest and transactions.

The management expense is the fee levied by the fund’s management company. This fee is detailed in the prospectus and can be as much as 1% of the fund’s assets every year. These fees cover both marketing and fund administration costs. Interest expenses are costs related to holding derivative securities. All derivatives have an interest rate built into their pricing. This rate, known as the risk-free rate, is very close to the short-term rate on U.S. government securities. Buying and selling these derivatives also results in transaction expenses.

Interest and transaction expenses can be hard to identify and calculate because they are not individual line items, but instead a gradual reduction of fund profitability. One approach that works well is to compare a leveraged ETF’s performance against its underlying index for several months and examine the differences between expected and actual returns.

Example: A two-times leveraged small-cap ETF has assets of $500 million, and the appropriate index is trading for $50. The fund purchases derivatives to simulate $1 billion of exposure to the appropriate small-cap index, or 20 million shares, using a combination of index futures, index options and equity swaps. The fund maintains a large cash position to offset potential declines in the index futures and equity swaps. This cash is invested in short-term securities, and helps offset the interest costs associated with these derivatives. Every day, the fund rebalances its index exposure based upon fluctuations in the price of the index and on share creation and redemption obligations. During the year, this fund generates $33 million of expenses, as detailed below.

Interest Expenses	$25 million	5% of $500 million
Transaction Expenses	$3 million	0.3% of $1 billion
Management Expenses	$5 million	$1% of $500 million
Total Expenses	$33 million	- -

In one year, the index increases 10%, to $55, and the 20 million shares are now worth $1.1 billion. The fund has generated capital gains and dividends of $100 million and incurred $33 million in total expenses. After all expenses are backed out, the resultant gain, $67 million, represents a 13.4% gain for the investors in the fund.

On the other hand, if the index had declined 10%, to $45, the result would be a very different story. The investor would have lost $133 million, or 25% of his invested capital. The fund would also sell some of these depreciated securities to reduce index exposure to $734 million, or twice the amount of investor equity (now $367 million).

Note: This example does not take into account daily rebalancing, and long sequences of superior or inferior daily returns can often have a noticeable impact on the fund’s share holdings and performance.

Summary
Leveraged ETFs, like most ETFs, are simple to use but hide considerable complexity. Behind the scenes, fund management is constantly buying and selling derivatives to maintain a target index exposure. This results in interest and transaction expenses and significant fluctuations in index exposure due to daily rebalancing. Because of these factors, it is impossible for any of these funds to provide twice the return of the index for long periods of time. The best way to develop realistic performance expectations for these products is to study the ETF’s past daily returns as compared to those of the underlying index.

For investors that are already familiar with leveraged investing and have access to the underlying derivatives (e.g. index futures, index options, and equity swaps), leveraged ETFs may have little to offer. These investors will probably be more comfortable managing their own portfolio and controlling their index exposure and leverage ratio directly.

To read more on leveraged ETFs, see Rebound Quickly With Leveraged ETFs.

by Tristan Yates, (Contact Author | Biography)

Tristan Yates writes articles on index investing, options strategies, and leveraged portfolio management for Investopedia and Futures And Options Trader and distributed through Yahoo! Finance, Forbes, Kiplinger, and MSN Money, and his research on leveraged ETFs has been cited by the Wall Street Journal. He is the author of Enhanced Indexing Strategies: Utilizing Futures and Options to Achieve Higher Performance. Yates has an MBA from INSEAD, a leading international business school, started his career managing risk for the $550B GNMA portfolio and helped lead the $1.1 Trillon securities restatement at Fannie Mae.

** This article and more are available at Investopedia.com - Your Source for Investing Education **

http://www.morningstar.ca/globalhome/industry/news.asp?articleid=ArticleID12920081521

Leveraged ETFs may not perform the way you think by Esko Mickels / Al Kellett | 18 Dec 08 | | Click the print icon in your browser to print this report. Their returns can deviate significantly from the index. The last several years have witnessed the introduction of a host of exchange-traded funds (ETFs) that let investors access asset classes in cheap and novel ways: Barclays Global Investors Canada Ltd. introduced funds of ETFs, Claymore Investments Inc. launched a series of fundamental index funds, and BetaPro Management Inc. gained popularity with its Horizons leveraged bull and bear funds. Investors have leapt at the opportunity, pouring billions into ETFs. At the end of November, Morningstar's database contained 92 ETFs in Canada with $17.3 billion under management. The rapid pace of innovation is tough to keep up with, and the financial engineering needed to create these complex products means investors don't always understand the risks involved. This is particularly the case with the Horizons BetaPro ETFs. A quick look at the recent performance of certain funds indicates something isn't quite right: for example, both the Bull (HGU) and Bear (HGD) versions of Horizons BetaPro S&P/TSX Global Gold ETF, which are supposed to be mirror images of each other, are down substantially this year. These funds clearly haven't performed the way many investors thought they would. A closer look at how these products work reveals some inherent quirks that can lead to significant deviations from the underlying index. There are different types of index funds and ETFs -- those that hold the same underlying securities as the index, and those that create a synthetic portfolio with a similar return through the use of derivatives such as futures, forwards, options and swaps. In Canada, Horizons BetaPro is currently the only provider of leveraged and inverse-leveraged ETFs. These use derivates in an attempt to match twice the daily performance of an index, which means their performance over periods greater than a day won't necessarily be two-times that of the index. The risks to investors lie in the execution of the synthetic strategy. Imagine two investors who want to make a bet on the price of Kryptonite, which is sitting at $100. The optimist invests in a two-times leveraged bull ETF, while his pessimistic counterpart buys units of the leveraged bear fund, each costing $100. The next day Kryptonite moves up 10% to $110. Ignoring fees and transaction costs, for the moment, the bull fund rockets to $120, and the bear fund falls to $80. The day after that, Kryptonite settles back to its original price of $100, a 9.1% retrenchment. To double that move, the bull fund goes down 18.2% to $98.19, and the bear fund gains the same percentage, rising to $94.55. Kryptonite is the same price it was at the beginning, yet both investors have lost money even before fees. When ETFs are rebalanced daily, negative compounding creates a drag that increases with higher volatility. Conversely, a market that trends in one direction without fluctuating can cause ETFs to return more than their benchmarks. Leverage exacerbates the effects of volatility, and over longer periods it can really penalize performance. For example, Horizons BetaPro estimates that before fees a two-times leveraged ETF tracking an index that's flat on the year with 25% volatility will lose 6.1%, and if there's 50% volatility it will lose 22.1%. Considering that the VIX, an index that tracks the implied volatility of the S&P500, is currently at unprecedented highs, it's easy to imagine the serious harm a buy-and-hold strategy could suffer when invested in this niche product. The upshot of having exposure to volatility is that you have to be correct not only on the direction of your investment, but also the path it takes to get there. When returns are extreme, volatility is usually high. This is dangerous because it makes ETFs prone to "perfect storm" macro events, which have a pesky habit of occurring more frequently than they're supposed to. It is precisely during times of stress that you might expect some of the bear ETFs to perform best, so you would be justifiably disappointed if they were down. Complicating matters further, there are a host of other factors, such as fees and transaction costs, that can cause an investor's return to deviate from the movements of the underlying exposure. Horizons BetaPro ETFs have a management expense ratio of 1.15%, which is low compared to most mutual funds, but significantly higher than many other passive strategies. Index funds offered by Claymore and Barclays have expense ratios more in the range of 50 to 60 basis points. On top of the management expense, Horizons BetaPro ETFs incur an expense on their forward contracts that ranges from 0.4% to 1% per annum, depending on the fund, plus the hedging costs incurred by the counterparty. The prospectus also lists a 0.25% discretionary redemption fee. When you add it all up, plus the fact that you incur brokerage fees to buy and sell them, these are expensive products. ETFs trade on exchanges similar to stocks. Hence, during periods of heightened uncertainty the bid-ask spread will often widen. This can result in orders transacting at prices that deviate from the net asset value (NAV). And for those funds that reference the price of a commodity, there is also basis risk, which is the risk that the price of the forward contract deviates from the spot price. Despite the drawbacks, leveraged and inverse-leveraged ETFs have benefits. They offer non-recourse leverage, which means the most investors can lose is their initial investment, despite essentially borrowing money to invest. And while short positions can theoretically incur unlimited losses, bear ETFs have limited liability. Many investors are also constrained in their ability to short, so inverse ETFs can solve this problem. Not to mention they provide access to areas of the market that would otherwise be difficult to invest in, such as gold bullion, natural gas and grains. Leveraged ETFs are short-term instruments, and the longer you hold them the higher the chance they will underperform their underlying exposure. Institutions often use them to hedge temporary unwanted exposures. But to use them for speculation is dangerous, because consistently predicting short-term movements in commodities and equity markets is virtually impossible, and when leverage is involved you're playing with fire. For longer-term investment you would be better off buying an ETF that actually holds the underlying securities rather than a synthetic exposure based on daily moves. Esko Mickels is a fund analyst with Morningstar Canada. Previously, he worked for two Canadian fund companies in equity research, communications and as an advisor. He earned a BA in economics from the University of Western Ontario, an MBA (finance) from the University of Toronto's Rotman School of Management, and has completed all three levels of the CFA program. Al Kellett is a fund analyst with Morningstar Canada. Previously, he was a fixed income trader and hedge fund analyst for a global financial institution. Al holds a Bachelor of Commerce degree from McGill University. He holds the Chartered Alternative Investments Analyst and Derivatives Market Specialist designations, and is currently working toward the Chartered Financial Analyst designation. Copyright © 2009 Morningstar Research Inc. All rights reserved. Not to be redistributed without written permission. To order reprints call 416 489-7074.

List of (all?) ETFs

Here's a sub-list of ETFs (go to the main site for all(?) ETFs)

http://etf.stock-encyclopedia.com/category/leveraged-etfs.html

15 most beautifully busty Japanese babes

Can't stop from posting this one :)

http://coedmagazine.com/2009/10/26/the-15-most-beautifully-busty-japanese-babes/

Lock in the Gains: How High Probability Traders Exit ETF Trades

http://www.tradingmarkets.com/.site/etfs/commentary/etfs/Lock-in-the-Gains-How-High-Probability-Traders-Exi-82609.cfm

Lock in the Gains: How High Probability Traders Exit ETF Trades

• By David Penn
• On 9:49 am EDT, Thursday October 29, 2009

With the dollar retreating after its overbought bounce and stocks and commodities advancing in the first few hours of trading on Thursday, now is a good time for ETF traders to focus on how to exit an ETF trade.

This is important for all ETF traders, whether you trade ETF PowerRatings, our High Probability ETF Trading strategies or simply use our research to help guide your own short-term, ETF trading. Knowing how to exit an ETF position is as fundamental a skill as entering an ETF trade. And in the same way that there are a variety of ways to take a trade on an ETF after it has pulled back, there are also a number of ways to properly exit an ETF trade. Being a discipline, professional-caliber trader means being as comfortable taking trades as exiting trades.

For a refresher on tactics for entering ETF trades, click here to read Larry Connors' Trading Lesson of the Day, "How to Correctly Trade Stocks and ETFs, Part 2".

Now let's look at a pair of strategies on how to exit an ETF trade.

The 5-Day Moving Average

The 5-day moving average exit is one of our most popular ways to exit an ETF trade. By waiting for an ETF bought on pullback to rally and close above its 5-day moving average, high probability ETF traders are exiting the ETF trade on strength - the goal of every mean reversion trade. Remember, as Larry Connors says, high probability trading is about "buying the selling and selling the buying." This means that when an ETF bought on pullback, or bought when its ETF PowerRatings was 8, 9 or 10 recovers and shows strength, it is time for the high probability trader to exit the ETF trade, lock in any gains and move on to the next opportunity.

After pulling back into oversold territory, the S&P 500 SPDR ETF (AMEX:SPY - News) rallied to close above its 5-day moving average soon afterward, providing an excellent opportunity to exit the ETF trade profitably.

The 2-Period RSI

Using the 2-Period RSI as a tactic for exiting an ETF trade is perhaps our favorite approach. While the 5-day moving average exit is an excellent way to exit an ETF trade, there can be instances in which the 5-day moving average exit will call for an exit sooner than the 2-period RSI. In this way, in addition to being relatively simpler to use, the 5-day moving average also can be a relatively conservative approach to exiting ETF trades.

In this example with the iShares MSCI Brazil Index ETF (NYSE:EWZ - News), waiting for the ETF to close with a 2-period RSI of more than 70 to exit helps improve gains on the trade. The numbers 8, 9 and 10 reflect EWZ's ETF PowerRatings during the pullback.

To exit an ETF trade using the 2-period RSI, high probability traders should wait for the ETF that have taken a position in to close with its 2-period RSI above 70. In exiting the ETF trade after the RSI has closed above 70, traders are waiting for the previously oversold ETF to become overbought. This is another way of "buying the selling and selling the buying." Because an overbought market represents a market that has become saturated - if not supersaturated - with buyers, waiting until that moment to exit an ETF trade is an excellent way to "sell the buying" and to the resumption in demand for the ETF as an opportunity for profit-taking.

High probability ETF trading requires a few things. But having a quantified, disciplined approach to entering and exiting ETF trades is near the top of the list. Sticking to a coherent strategy that allows you to enter and exit ETF trades the same way every time is key to being a winning, successful high probability trader.

David Penn is Editor in Chief at TradingMarkets.com.

http://www.freestockcharts.com/

To check later .....

http://www.freestockcharts.com/

Best-Charts TA software

Best-Charts TA software ... Gives alot of info, but not really sure what to make of that info...

http://www.stock-anal.com/

ETF vs. Index Volume: Divergences and Trend Confirmation

ETF vs. Index Volume: Divergences and Trend Confirmation

http://www.portfoliotilt.com/Technical-Analysis/Education/etf-vs-index-volume-divergences-and-trend-confirmation.html

Gauging Support And Resistance With Price By Volume

http://www.investopedia.com/articles/trading/06/PBVChart.asp

PDF: John J. Murphy - Technical Analysis Of The Financial Markets

PDF: John J. Murphy - Technical Analysis Of The Financial Markets

http://w13.easy-share.com/1230440.html

Wait ~30 seconds, type in the security word and voila

PDF: A Non-Random Walk Down Wall Street

The entire book in PDF format, courtesy of Princeton...

A Non-Random Walk Down Wall Street
Andrew W. Lo & A. Craig MacKinlay

http://press.princeton.edu/books/lo/

Looks to be a very powerful site, although it's trial-based, 14-days...

www.marketscreen.com

Financial Visualizations - Stock screener, looks good!
http://www.finviz.com/

Good section for newbs, and great section on chart analysis (of recent charts)
http://decisionpoint.com/

Technical Analysis software that I use right now... There are obvious limitations to the software, such as 3-year (EOD) historical data (up to 10 yrs if you pay), and no TSX/TSX-V data feeds. Great to draw trend lines, fibonacci lines, etc.
www.ChartNexus.com

http://www.goldsilverspot.com/spot-price-ticker-added/

Spot price of gold, silver, platinum, and palladium.

StockTA.com

http://www.stockta.com/

Automatic TA results :)

Also monthly articles on TA

2 thumbs up!

Disable XP-forced restart

How to disable the XP-forced restart after applying patches

http://www.technize.com/2009/04/01/disable-annoying-restart-notification-after-windows-update/

Japanese Candlestick Patterns

Intro to japanese candle stick patterns, complete with descriptions, reliability, and cheat sheets.

http://www.masterdata.com/CandleStick/index.html