There is nobody in the business of stock market advising with more credibility than Mike Paulenoff. It's not only his background -- his Georgetown education, his work at top firms like Smith Barney and Drexel Burnham Lambert, his co-authoring of the "Business-One Irwin Guide to the Futures Markets "(with Stanley Kroll). It's not only the institutional quality of his work and the respect he has as a "professor" at Minyanville as well as reliable source on sites like Wall Street Journal Online. It's also the fairness and transparency with which Mike presents his trades and technical analysis.
Subscribers to Mike's ETF & Stock Trading Diary receive alerts prior to Mike's trades, with Mike noting ahead of time the points at which he'll enter or exit a particular stock or ETF. They see detailed, annotated charts that illustrate the reasoning behind each trade, and receive targets and stops that are religiously adhered to, in an alerting system that is second-to-none. Since the service's launch in February 2003, not a single member has complained of being unable to follow Mike's trades. "You have the best service I have ever come across," Cliff Trovarelli, Baldwin, N.Y., sums it up best. "You are honest, sincere, and a straight shooter!"
Take his recent trade, for example, in Twitter (TWTR). First came the alert that Mike would be entering the trade at a level below where the stock was currently trading, preparing subscribers for entry. Once the stock reached that level, a trade alert was issued, complete with protective stops and targets. Minutes later, a detailed chart was posted showing the pattern and reasoning underlying the trade, as the stock had climbed and sustained above his key near-term demarcation line at 38.40, arguing for the establishment of a new long position into strength.
In mid-November 2014, when the Shanghai Composite was trading at 2469, Mike selected the benchmark China equity index as one of the key areas to watch intermediate-term for a breakout into a bullish period.
Technically, he saw the Shanghai Composite Index on the verge of upside acceleration from a three-year rounded base formation. On a macro level, it appeared that fears of a "hard landing" for the Chinese economy, or a debt-induced economic contraction, were misplaced and exaggerated, and that Chinese companies were growing, increasingly profitable, and attracting investment funds globally.
During the subsequent eight weeks, the Shanghai Composite rocketed to a January 9 high at 3404.83 (+38%). MPTrader subscribers participated in the upmove by entering CAF (Morgan Stanley China A Share Fund) at 24.05 on October 29, and exiting the position at 30.77 on December 5 for a gain of 28% on the position.
Mike's trade set-ups are archived in a table in his Trading Room, where you can view the history of every trade. Trades range from commodity plays in gold, silver, oil and natural gas, which are mostly ETF trades, to sector plays like technology or financials, where Mike often prefers the key component stocks like AAPL or BAC to the sector ETFs. Mike also looks overseas to regions like Japan and Germany, where understanding euro-yen currency trends helps him identify opportunities, and Brazil, whose natural-resource rich economy offers many profitable plays.
In all his trades, Mike uses a combination of macro and technical analysis, first identifying the trend -- and the trending sector or asset class -- and then drilling down to find the ETF or stock whose chart is best poised to profit. He'll buy the TBT to profit on the topping of Treasuries, or Cameco (CCJ) and Freeport-McMoRan Copper & Gold (FCX) as mining/resource plays; or the GLD to capture gold's move, with the average trade lasting 3 days.
Pattern recognition plays a big part in the chart analysis. For example, recently charting the ratio of the SPY price over the price of the GDX, Mike noted a double-top formation that was (and continues to be) trending lower, warning us to expect the SPY to continue to underperform the gold-mining ETF.
In several weeks following that post, the GDX has climbed 12%, while the SPY has appreciated only 1.4%.
Everyone wants winning trades -- and the best chance of getting them is when the forces in favor of the trade converge. Identifying these convergences is where Mike Paulenoff is best! Combining macro and technical analysis, Mike will put out a trade only when the macro environment is as attractive as the chart.
For example, he recently traded Guggenheim Solar ETF (TAN) to capitalize on the solar energy sector's "perfect storm": Backing by, and tax credits from, the Obama Administration, solar panel price compression, rising fossil fuel and electricity costs, and constant geopolitical threats to global energy output.
And the chart itself needs to have a number of a confirming signals -- the right pattern and relative strength indicators, for example -- including confirmation in different timeframes.
In the case of TAN, the technical set-up suggested strongly that a major corrective phase off of the March 2014 high was complete ahead of the initiation of a new up-leg within the larger bull phase (in TAN) that began in November 2012 at 12.60.
It's all about perspective. When the big picture of the sector or asset class -- or of the chart, for that matter -- is aligned with the expected move, the probability of a successful trade is greatest.
It's not enough for any market guru just to be right! They need to be clear! Traders want to trust and understand the trade, and, moreover, improvise on it, and that requires mentoring! At MPTrader, every one of Mike's trades is described in a detailed, annotated chart. What is the pattern? Where are the support and resistance zones? Why should the pattern resolve at the specific target?
Where the text ends, periodic Webinars begin. There you can ask Mike questions, watch him draw lines on the chart, hear him describe the technicals in full detail, while also discussing the bigger macro picture. See an example below.
There is no substitute for mentoring. The best training is to watch experienced traders navigate the markets. And Mike has three decades of experience to tap: "During the past 30 years, I have catalogued and experienced thousands of patterns, which provide the basis of determining if a trade has a high degree of success. On top of the patterns, I overlay various mathematically-based momentum studies, and lastly I introduce as much market psychology as possible (positive and/or negative) into the particular situation to help me anticipate if a particular outcome is reasonable, and probable."
He is constantly adapting and improving his approach, which continually shares with subscribers: "The major misconception among traders is that trading systems work indefinitely. That is, until they don't work anymore, and rest assured, at some point each system will stop working, so ALWAYS, ALWAYS continuously tinker with and improve your system and methodology as if it is a living, breathing organism that constantly needs nutrients and nurturing."
Where is the market heading today...and why? If that's a question on your mind each morning at an hour before market open, then a look inside Mike Paulenoff's ETF & Stock Trading Diary pre-market is a must! There you'll find not only a preview of the day's important news (earnings & economic releases, Fed announcements), you'll see detailed chart analysis on how the S&P 500 was trading overnight via its round-the-clock emini contract. The same pattern recognition and momentum analysis techniques used to pick winning stocks and ETFs are used to analyze the index...which Mike follows throughout the day in various timeframes.
In fact, successful index analysis underlies the ability to make winning trades, as being on the right side of the market increases the chances of success. Plus, many of Mike's members use the service not only to follow individual issues but to gauge market direction. They use it to identify and hedge risk...for their own portfolios or those they manage. They use it to trade index ETFs, futures and funds.
When you get to know Mike's index analysis, you'll learn about terms like Bollinger Band lines and how these bands help anticipate price behavior. You'll see Mike draw trendlines and better understand channel analysis. You'll learn about cycle analysis as a predictive timing tool that identifies potentially significant near-term bottoms and tops.
That's why technical analyst and stock picker Harry Boxer calls Mike Paulenoff "the best index analyst I know." That's why Mike's technical chart analysis is among the most respected on Wall Street, why hedge funds and institutional investors rely on it just as much as individual traders.