$NEWL: The sinking turd that makes money if you can time it correctly!

NewLead Holdings Ltd. ($NEWL) is an international shipping company with a market capitalization of $19 million. Their mainly engaged in the transportation of refined products, such as gasoline, jet fuel, and dry bulk goods, such as iron ore, coal and grain. Although it is not clear they are currently doing any of the above tasks because of recent downsizes.

It is my belief that this company is headed for bankruptcy if not already in this state. The company for the past few years has been clearing their indebtedness by diluting shares, downsizing staff, selling and decommissioning their fleet of ships and introducing endless reverse splits to preserve their NASDAQ listing so they can raise money and dump shares on dumb investors.




When you analyze the overall trend of this company, it's really a fool's game. All you have look at is its highest price per share since inception (which tops at a staggering $2200 because of all the endless reverse splits) and its current price of 70¢ to realize that this is a sinking ship.

Another perspective to think about is a $10,000 investment back in 2005 would now be valued as little as $3 in 2013. This company is a turd and should not under no circumstances be kept longer then a month, unless if you enjoy losing money of course.




Although the company is a stinker when it comes to being valued as a long-term investment, it has provided some of the sickest recoveries in the past 5 years in a row. $NEWL has always repeated this trend. Back in 2012 it recovered 856% and the year prior 172%. If you're able to time a proper entry you can make as much money in a month as you would with a blue-chip company in several decades.

$WWE headed for near $18 in 2014


Based on my personal analysis. I have determined that $WWE a sports entertainment company is nearing a near $18 regressive close. This event can easily happen in the near time future (Q1-Q3 2014) giving way to an easy 20-35% price spike up until the 30th of June 2014. Although no investment is 100% secure, I have calculated that the likelihood of this event happening is highly plausible and would warrant a safe investment opportunity. Cheers!


Stock Market Indicies Per Sector

Stock Market Indices are mathematical constructs used to describe markets. Although some indices are weighted differently, majority are computed by measuring the weighted average of their set. Stock market indices can be used to describe a section of the market or encompass the whole. How you use them largely depends on your preference and goal. I prefer to use them as indicators to time my entries and exits enabling me to optimize my profits and losses.

One method I like to do is to segment the top earners of each sector and industry per month for the past trailing year. This method allows me to pick winning companies since I'm always investing into winning sectors and industries. The likelihood of me losing money is also greatly diminished whenever the company I select goes sour. The illustration below identifies the current leading sectors per month for the past trailing year.

Selecting Best Sector And Industry For The Past 15 years!

I have examined all sectors using the Dow Jones Sector indices. To gain a better understanding of how the Dow Jones Sectors indices are tallied click here.

In order for me to gain a broader understanding what direction the markets are headed I must first zoom out and look at its most macroscopic direction. I used the PerfChart feature on located on stockcharts.com to give me a percentage based gauge of all the indicies in the highest available timeframe which was 15 years with my level of subscription to the site.



Based on all the results I was provided. It was determined that the energy sector to be the most dominant sector amongst all Dow Jones sector indices in the past 15 years. The energy sector was the winner possessing the highest return at the end of its period.

Next the step was repeated for all industries containing inside the energy sector. Unfortunately I was only provided 406 days of raw data based on my subscription level. I concluded that the renewable industry was the most dominate industry possessing the highest companies that consist of solar energy!



Think about that! Solar is the way to go!


US Economy In A Nutshell

When trying to understand the economy of the United States, it is not uncommon to be confused or perhaps misguided by newspeak rhetoric or arbitrary metrics that carry little weight towards making an investment decision. Containing the monolithic beast within an easy-to-understand figure should not be thought of as an arduous task, only achievable by financial talking heads and academic scholars. The US economy on a macroscopic scale should only be viewed as a commercially viable and profiteering business. Instead, we trick ourselves into believing that it is a peace-loving charitable entity, that involves itself with humanitarian aid and global conflict resolution. When in fact, every decision made is cold, calculated, and in accord to the proliferation of the nation's reign.




The illustration above shows a simplified variant of the US economy. The commodities market is the cornerstone to any financial market's success. Its role in the economic spectrum is to establish the value of raw products. The GDP is the market value of all manufactured products and commercial services. The quotient between the GDP and the commodity market index ($CRB) is the return-on-investment (ROI), which is a metric used to determine the profitability of the investment (product). The producer price index is a metric used to determine supply, and the consumer price index is a metric used to determine demand. The stock markets' role in the US economy is that of a manufacturer and distributor. Depending on the demand of a product or service, it will purchase up raw goods (commodities), convert them to finished goods or commercial services, and finally distribute them to the consumers (at profit).

Whenever profit is made, it is always taxed by the federal government and the remaining sum goes back to the corporate coffers that make up the stock market. The government's duty is to supervise, regulate, enforce taxes, and at rare occasions, offer relief to failing businesses.


Trading With Pivot Points

Profitable traders know the future. Knowing when to enter the market, place stops and take profits, could be the difference between being a bag holder and a wealthy opportunist. Using reference points as a predictive tool to measure support and resistance levels helps identify risk. Without some form of risk assessment, the likelihood of losing all or a significant amount of capital is relatively high.




One tool that permits us to do all of the above is the pivot point. A pivot point is a predictive indicator of market movement. It is used to determine the significant price levels of a financial market. There are several different methods for calculating pivot points, the most common of which is the five-point system (classic). This system is calculated as an average of significant prices (high, low, close) from the performance of a market in the prior trading period. Generally speaking, the pivot point is seen as the primary support or resistance level. If the market in the following period trades above the pivot point it is seen as a bullish indicator, whereas trading below the pivot point is seen as bearish.

Additional levels are also used above and below the pivot points by calculating price differentials from previous trading ranges of the market. These levels are used to determine a multitude of ceilings (resistance levels) and floors (support level) for the following trading periods, and represent key junctures where the forces of supply and demand meet.




Whenever there is an active trading range, the economic model of price determination is in play. In the financial markets, prices are driven by excessive supply (down) and demand (up). Demand refers to how much quantity is desired by buyers, and is synonymous with buying, bullishness, and resistance levels. Supply represents how much quantity the markets can offer, and is synonymous with selling, bearishness, and support levels. Price is a reflection of supply and demand. As demand increases, prices advance and as supply increases, prices decline. When supply and demand are equal, prices move sideways and are said to be in a state of equilibrium (fair value).

Support and resistance levels derived from pivot points can be used just like traditional support and resistance levels. Support is the price level at which demand is thought to be strong enough to prevent the price from declining further. Resistance is the price level at which selling is thought to be strong enough to prevent the price from rising further. Although it is uncommon, both support and resistance levels can fail to hold, signaling that the relationship between supply and demand has changed. Usually, this occurs when new information is released or anticipated. A breakdown below the support indicates that sellers have reduced their expectations and are willing to sell at even lower prices. A breakout above the resistance indicates buyers have increased their expectations and are willing to buy at even higher prices. Once a break occurs, the former level becomes the inverse of itself (a break below support, confirms a new resistance level; a break above resistance, confirms a new support level.)

Being aware of price action in relation to key support and resistance levels, can greatly enhance a trader's analysis and forecasting abilities. A useful rule of thumb to remember:

  • If the price of a financial market approaches an important support level while buying pressure has increased, a potential bullish reversal might occur.
  • If the price of a financial market approaches an important resistance level while selling pressure has increased, a potential bearish reversal might occur.




The example above is a simple strategy I devised using a few technical indicators in relation to pivot point crossovers. The strategy uses a five-point system to identify a crossover (either through a pivot point, or one of it's derivatives.)  As seen above, the buy signal was initiated right after a resistance level was broken and buying pressure exceeded it's 3-month exponential moving average. A relative strength indicator was used to determine if the purchase price was overbought or undersold. In the case above, the RSI confirmed that the security was undersold while above a resistance level (this gave more merit to the previous buy signal.) The sell signal was initiated when a support level was broken, and the active selling pressure exceeded it's 3-month exponential moving average.