The Dividend That Could Sink Google

Hey Trader, Picture a company telling you it’ll start paying you a dividend every quarter. You’d probably call that good news. If that company is a growth stock, the announcement can cut its price in half. Take Google. It’s a $338 stock. If it announced a recurring $5 dividend tomorrow, I’d expect it to trade at $200. Finance calls this dividend signaling. A dividend reveals what management privately believes about future earnings and cash flow. Insiders know far more about a company’s cash than you or I do. The dividend is how they tell you. That signal works in opposite directions, depending on who sends it. When Procter & Gamble or Exxon raises its dividend, the stock tends to climb. I taught a case study on this at least once a semester for six years at DePaul. I’d still bet 99% of you have never heard of it. A dividend

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Why Breadth Breaks Before The Index Does

Hey Trader, The S&P 500 broke out today. I want you to ignore it. Because there is something far more important that tells you the strength of the market. You see, the index is one number. It hides what’s happening underneath it, and you pay for that blind spot when the leaders finally quit. Right now, twenty stocks are carrying this market. The other 480 are garbage that nobody even tracks. In fact, half the S&P 500 index sits in bear market territory! Let me give you an example. Merck printed a 52-week high this morning. J&J sat right on an all-time high. McDonald’s printed a multi-decade low on the same tape. Nothing is wrong with the company. I have watched that setup resolve once before. That time, we corrected from 6,800 down to 5,400. And while I love the advance-decline line, it only gives you a snapshot of things.

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3 Keys to Set Your Profit Target Before Entry

Hey trader, Your profit target is the reason your winners keep turning back into scratches. You pick the number you want to earn instead of the number this tape can pay. The market went into a low volatility shell about three months ago. You’re still pricing your exits off the market that existed before that. You roll the position and wait for the bigger number. You give back gains you already had in hand. I set my FITB number out loud before that trade ever went on. Below, I’ll walk you through the three inputs behind it so you can run them on your next entry. The Market Sets The Size Of Your Number Input one is the tape you’re trading in. I run a lot of models and not one of them shows an edge here. The worst thing you can do in a market like this is force

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Indicators Means Nothing Unless This Is True

Hey Trader, One indicator gets you nowhere. So you add a second, then a third. Maybe four indicators if you’re feeling frisky. Counting them was never the job. More doesn’t mean better, nor does more agreeing at the same time. Because if you stack four momentum tools and you’ve bought one opinion four times over. I want you to give you a new way to think about this: Treat each indicator as its own set of buyers. Four tools measuring the same thing are the same buyers, counted four times… …but four tools measuring DIFFERENT things give you four votes. Votes move a stock. Opinions don’t. Here’s the fastest way to catch yourself double-counting. The RSI and the CCI are brothers. One adjusts for volatility and the other doesn’t. That’s the whole difference between them. Run both and you didn’t get two votes. You got the same vote twice. So

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Why Algorithms Squeeze Every Early Short

Hey Trader, Short a rising stock in my room and I’d fire you on the spot. I’d flunk you too. Ten years of teaching this hasn’t softened me on it. Nobody gets rewarded for going first. You just get your head cut off. Algorithms are programmed around slopes. They don’t wait for the top. They move BEFORE we ever get there. So, why try to squeeze that last bit of juice from a lemon that’s already spoiled? Obviously, you shouldn’t. Instead, I want to show you how to think like the machines. That way, you know where to plan your exits and avoid stepping in front of a bulldozer to pick up pennies. What A Bollinger Band Actually Shows You I covered the moving average envelope and the Keltner Channel in the last two sessions. Today I’m on the Bollinger, and this read transfers to any of them. A Bollinger

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What A One Dollar Put Actually Buys

Hey Trader, Earnings night is where I watch good companies get handed over for free. A guy owns something he likes. The report lands after the close. He doesn’t want the gap. So he sells at four o’clock and promises himself a cheaper price in the morning. That cheaper price never shows up. I’ve been watching people make that trade for 25 years. I own Kroger. It trades cheap against its own guidance, and the insiders have been buying millions of shares while nobody else will touch it. Kroger printed a buck nine. The stock opened down anyway, and the money that never read the release threw it out the door. I didn’t sell a share. I bought a one dollar put and then I sat on my hands. That dollar wasn’t a bet against my own stock. It was the price of not having to make a decision at

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4 Reasons Your Stock Is Down Today

Hey Trader, You pull up a position and the stock is down. The chart shows nothing wrong with the company. So you guess at the cause. That guess costs you twice. You either sell a good company at the low, or you add to a broken one. Novartis did this to people yesterday. It gapped down hard, and nothing had changed at Novartis. Amgen reported a disappointing trial result. Amgen fell about 10 percent, and Novartis got dragged down as collateral damage. Anyone holding Novartis and watching only Novartis never saw it coming. The cause was sitting on a ticker they weren’t tracking. That’s what makes it dangerous. You can’t pick the right response until you know why the stock is down. A stock goes down for four reasons, and I found all four on my screen this morning. Each one has a different correct move behind it. Two of

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How to Trade an Index Addition Pop

Hey Trader, I know a few arb guys. When a stock gets added to the S&P 500, they load the boat short and head out. They short it at 280 and leave the office in ten minutes. They already know how it ends. Every index fund and every index-mimicking fund has to buy that stock. They have no discretion at all. The mandated buying dries up fast. Then the zero DTE crowd takes 10 or 15 dollars out of it the next morning. Bloom Energy is doing this today. The stock is up big on the addition alone. The earnings didn’t improve. Insiders bid it up before the announcement, so today’s buyers are the last to learn. I’d sell it. If you bought it this morning, I’d fire you. Let me tell you what’s in the article. I’ll walk you through the three-day rule that hands this stock back to

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The Bond Level Holding Up Everything

Hey Trader, It hit 111 degrees here on Tuesday. By five in the afternoon it had cooled off to 101. Right now it is 94 outside. The heat is not really the story. The humidity is. That kind of buildup is what we call Indian summer. It signals the end of one season and the start of another. The bond market is giving off the same signal. It sits in a very precarious position right now. I call it Humpty Dumpty. It is perched on the edge of a wall. When it falls off that wall, it blows out the bond market. Then it blows out the stock market right behind it. Bessent is buying Treasuries to hold that level up. He is doing it because a major buyer is pulling back. That buyer is Japan. Their rates just hit the highest level in about 40 years. In this article

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How to Tell A Washout From A Real Breakdown

Hey Trader, A stock breaks support and closes red. Your screen calls that a sell – a real breakdown. So you get short. That trade costs you twice. You hand your shares to the buyer at the low, then you pay him again on the squeeze. Best Buy did this to people after earnings. It cracked support, traded down to 76.70, and closed back up near resistance. The shorts got three bucks out of it, from 82 down to 79. Then it turned and ran to 90 in about a week. I missed that trade. I flat out missed it, and the chart was telling me to load the boat. Today I want to show you the one reading that separated the sell from the buy. It came out of an Equivolume box, not a candlestick. Nine million shares traded that session against a three million average. Wide boxes on

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