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Wiz Daily Journal

Is This A Recession???

Friday, January 27th, 2023
Is This A Recession???

After a year (2022) that left us feeling rather "HUNGOVER", fundamentals, profits, and diversity are crucial. Considering the investment prognosis for 2023, there was nothing to celebrate in the investing sector last year.

In 2022, all three (3) major stock indexes – the Dow (DJX), S&P 500 (SPX), and Nasdaq (IXIC) – sustained losses. Even the bond market did not want to be left behind, with the Bloomberg Aggregate Bond Index falling by double digits.

A few bright spots did occur; ENERGY sprung into life. The major stock and bond indices experienced a poor year in aggregate. Persistent COVID troubles, the crisis in Ukraine, persistent inflation, and what appeared to be interminable Fed rate rises all took a toll. Not to add, many stock values were overvalued in 2021.

As we approach the new year (2023), it feels like we are waking up with a "HANGOVER", as many of the concerns from the previous year (2022) remain.

The Crucial Issue for 2023
The crucial question for 2023 is whether or not a "RECESSION" will occur. A portion of the answer relies on how a "RECESSION" is defined; is this a "GREAT RECESSION"??? Or an official downturn???
National Bureau of Economic Research data indicates that the "PANDEMIC RECESSION" lasted only two (2) months, whereas the "GREAT RECESSION" lasted from December 2007 to June 2009.

Much will rely on the decisions made by the Federal Reserve Board (FED). If inflation does not decline and the FED continues to raise rates, the near-term outlook for equities is not favorable.

Inflation will most likely decrease, resulting in a worldwide downturn. A shallower "RECESSION" is possible given the healthy labor market and the fact that, corporate and household balance sheets appeare strong.

Stock Market
In 2022, “VALUE” equities, such as some insurance firms and consumer staples such as health care, fared better than “GROWTH” stocks, such as technology. Given the magnitude of their price declines in 2022, many "GROWTH" companies now resemble "VALUE" plays.

2023 has arrived with an increased interest in DIVIDEND-PAYING stocks. HIGH-DIVIDEND equities may experience stress if investors abandon them in favor of safer interest-bearing TREASURY NOTES. Valuations are crucial, too. Numerous dividend-paying stocks are energy businesses whose valuations skyrocketed in the past year; one should be conscious of the price they are paying as they might be slightly overvalued.

It is predicted that there will be further volatility in the stock market, although the market may rebound before the economy.

Fixed-Interest
The last time both EQUITIES and BONDS were in the red at the same time was in 1977. Hopefully, fixed income will perform better this year (2023), and higher yields can now contribute to current income and provide a cushion against potential price drops.
MUNICIPAL BONDS were hit particularly hard in 2022, but the fundamentals remain robust suggesting that the market should be ripe for a rebound.
INFLATION, increasing INTEREST RATES, and an impending "RECESSION" may still spark a flight to quality, so YOU, ME, WE, the ATWWI FAMILY should exercise "CAUTION" when selecting trading/investing positions.

Whatever you decide for 2023, plan "CAREFULLY" and investigate "THOROUGHLY"!!!

PEACE & BLESSINGS
Kenneth Reaves, Ph.D.

Looking For Dividends??? Check Out These ETF's

Thursday, January 26th, 2023
Looking For Dividends??? Check Out These ETF's

In 2022, dividends once again became a safe harbor for investors reeling from the broad market’s high volatility and rising interest rates. Although many stocks decreased in price, dividend payers still provided investors with a nice income stream. As macro conditions in the new year remain bearish in many ways, you might be looking to increase your exposure to dividend-paying stocks.

BUT the question is, which ones should you purchase???


With so many options, investors looking for broad dividend exposure may be better off looking at exchange-traded funds (ETFs)* that focus on this niche. Three (3) that come to mind are the ProShares S&P 500 Dividend Aristocrat ETF (NOBL -0.02%), Vanguard Real Estate ETF (VNQ 0.25%), and the Vanguard High Yield Dividend ETF (VYM 0.11%). All three (3)* have their place, so which one should you buy???
*NOTE: Utilize our ATWWI "HOLDINGS" strategy

Each ETF has its own focus
These three (3) ETFs are not copies of each other, and each has its own "SPECIFIC" focus. This also plays into how much each ETF yields (what percentage of the ETF price is paid in dividends to you annually). YOU, ME, WE the ATWWI FAMILY should not ONLY focus on how high the dividend yield is, although it can certainly be a factor in the decision.

ETF                                                                      Dividend Yield
ProShares S&P 500 Dividend Aristocrat ETF (NOBL)                   2.1%
Vanguard Real Estate ETF (VNQ)                                               3.7%
Vanguard High Yield Dividend ETF (VYM)                                  3.0%

For example, just because the Dividend Aristocrat ETF (NOBL) has a lower yield doesn’t mean it should be ignored — it has its purpose.

This ETF only owns S&P 500 companies that have paid and grown their dividends for at least 25 consecutive years. While the dividend yield isn’t as high as the others, the reliability of the payouts from the companies in this fund is valuable to investors seeking stability.

The ETF significantly outperformed the S&P 500 last year, the steady dividend payers in this ETF offered the dual benefit of income and stability during the bear market.

Moving to an option with a higher yield, the Vanguard High Yield Dividend ETF (VYM) aims to mirror the FTSE All-World High Dividend Yield index, which tracks companies with high yields worldwide. Because it’s a global index, multiple economies are represented, which can be both good and bad.

However, most of the index is made up of U.S.-based companies, so it’s certainly far from a foreign-focused investment.

The highest-yielding ETF in this trio is the Vanguard Real Estate ETF (VNQ). This will be attractive to those ATWWI FAMILY members who want to maximize their dividend income. However, the real estate industry is far from smooth, so the ETF won’t be as stable as the other two. This is the price YOU, ME, WE the ATWWI FAMILY have to pay when prioritizing yield.

AND there is another factor we must consider...

The long-term performance of these dividend-focused funds is not the best
While dividends aren’t guaranteed, they are usually more predictable than share-price growth. Lower-risk investments (like dividend-paying stocks) typically underperform higher-risk investments, which is precisely what has happened over the past decade (even when dividends were reinvested in the ETF).

One thing to note is that the ProShares Dividend Aristocrat ETF (NOBL) almost matched the return the broader index while also being more price stable. This could make this ETF a strong choice for someone in retirement, as you only give up a few percentage points in performance as a trade-off.

If you spend or bank the dividends, the broader market’s outperformance becomes more evident.

Another takeaway is that real estate hasn’t had a great decade. This could change in the coming years, but the high dividend yield hasn’t replaced outright stock performance. Additionally, the global-focused High Dividend Yield ETF struggled, because the U.S. stock market has vastly outperformed the rest of the world in the past decade.

All of this could change in the next decade. In the end, yield, stability, and total return are all variables YOU, ME, WE the ATWWI FAMILY should consider as we weigh the pros and cons of giving dividends a place in our portfolios.

PEACE & BLESSINGS
Kenneth Reaves, Ph.D.

Utilize "PATTERN TRADING" To Minimize Uncertainty

Wednesday, January 25th, 2023
Utilize "PATTERN TRADING" To Minimize Uncertainty

A technical glitch with the New York Stock Exchange's opening auction yesterday (Tuesday, January 24th, 2023) caused more than 80 stocks to "HALT" trading right out of the gate.

Traders everywhere were uncertain about their orders and the apparent market "MAYHEM".

The New York Stock Exchange is the only major U.S. exchange that still uses a trading floor along with electronic trading, and technical errors like yesterday can quickly create anxiety and erode market confidence.

It may be the talk of the town, BUT the uncertainty, confusion, anxiety and lack of confidence are just another example of why it is important to me to follow a "SYSTEMATIC" RULES-BASED trading strategy.

No matter what the headlines say, YOU, ME, WE, the ATWWI FAMILY can trade patterns with confidence by simply following the rules.

I know it's easy to be uncertain, confused and, sometimes misled in trading, so let's discuss how you can avoid uncertainty, confusion, and more importantly how "RULES BASED" trading can clear up muddied water and allow you to reap financial benefits.

Self-Interpreting Market Can Lead to Uncertainty, Confusion and Losses

In 2018, the NYSE was fined $14 million due to a four-hour trading halt that occurred in 2015, resulting from a flawed software rollout.

Tuesday, January 24th, 2023, the exchange automatically cancelled orders on the open even though some of them should have been filled, causing "CHAOS" for market participants.

Over 80 stocks ended up halting trading due to confusion and will likely cost hundreds of thousands of dollars to remedy.

Computer glitches can cause market uncertainty and confusion. Luckily, they are infrequent events, BUT there are other things beside exchange glitches that can cause uncertainty, confusion, misrepresentation and trading losses.

A look at a put/call ratio is an example of something that can be "MISLEADING" ..

A PUT/CALL ratio less than 1 indicates there were more "PUT" options traded than "CALLS", and a ratio above 1 indicates more "CALL" volume than "PUTS".

Some traders will use the ratio and falsely assume a market direction or create a bias based on the ratio. So, one might assume a"BEARISH" market bias if there are more "PUT" contracts traded than "CALL" contracts.

Here's the reality, however... What the ratio does NOT make clear is that for every "PUT" or "CALL" buyer, there is a seller on the other side of the trade.

Buying a "CALL" creates a natural"BULLISH" bias because the security must rise for the option to profit. However, when the "CALL" is bought, another trader is selling it, and the selling "CALL" options is a "BEARISH" trade.

So, when a "CALL" option is traded it has both a BUYER and a SELLER". This means that one trader expects a RISE in value, while the other trader expects a DECLINE in value creating conflicting biases on the same option contract.

Placing trades based on "MISGUIDED" assumptions can cost you money. Now you can overstand/understand why it is so important for YOU, ME, WE, the ATWWI FAMILY to follow a "SYSTEMATICs approach to profiting.

Trading Different Strategies with a Systematic Approach
I have a variety of trading strategies for generating profits and getting you "P.A.I.D."I focus on five (5) areas that allows trading opportunities nearly every week of the year:

1) Trends
2) Statistical Probability
3) Seasonality
4) Volatility
5) Contrarian

Here is the thing every area of focus has a "SYSTEMATIC" approach for profiting. My "ALGO's" searches for repeatable patterns for all of our ATWWI strategies.
Then, once my software identifies a tradable pattern, I then take the next step by determining its reliability which means going back in time to test the pattern for reliability and consistency.

You see, following the data is how successful trades are created and profits are made.
It's NOT guesswork and hope, but rather "CONSISTENCY"!!!
NO trading mechanism will produce successful trades 100% of the time, BUT by trusting the data and trading favorable odds, success is proven over time.

PEACE & BLESSINGS
Kenneth Reaves, Ph.D.

Utilize "PATTERN TRADING" To Minimize Uncertainty

Wednesday, January 25th, 2023
Utilize "PATTERN TRADING" To Minimize Uncertainty

A technical glitch with the New York Stock Exchange's opening auction yesterday (Tuesday, January 24th, 2023) caused more than 80 stocks to "HALT" trading right out of the gate.

Traders everywhere were uncertain about their orders and the apparent market "MAYHEM".

The New York Stock Exchange is the only major U.S. exchange that still uses a trading floor along with electronic trading, and technical errors like yesterday can quickly create anxiety and erode market confidence.

It may be the talk of the town, BUT the uncertainty, confusion, anxiety and lack of confidence are just another example of why it is important to me to follow a "SYSTEMATIC" RULES-BASED trading strategy.

No matter what the headlines say, YOU, ME, WE, the ATWWI FAMILY can trade patterns with confidence by simply following the rules.

I know it's easy to be uncertain, confused and, sometimes misled in trading, so let's discuss how you can avoid uncertainty, confusion, and more importantly how "RULES BASED" trading can clear up muddied water and allow you to reap financial benefits.

Self-Interpreting Market Can Lead to Uncertainty, Confusion and Losses

In 2018, the NYSE was fined $14 million due to a four-hour trading halt that occurred in 2015, resulting from a flawed software rollout.

Tuesday, January 24th, 2023, the exchange automatically cancelled orders on the open even though some of them should have been filled, causing "CHAOS" for market participants.

Over 80 stocks ended up halting trading due to confusion and will likely cost hundreds of thousands of dollars to remedy.

Computer glitches can cause market uncertainty and confusion. Luckily, they are infrequent events, BUT there are other things beside exchange glitches that can cause uncertainty, confusion, misrepresentation and trading losses.

Let's look at a put/call ratio as an example of something that can be "MISLEADING" and you will get a better idea of what I mean...

In the image above you can see the time of day and the total number of "CALLS" and "PUTS" traded along with the ratio of puts to calls.

A PUT/CALL ratio less than 1 indicates there were more "PUT" options traded than "CALLS", and a ratio above 1 indicates more "CALL" volume than "PUTS".

Some traders will use the ratio and falsely assume a market direction or create a bias based on the ratio. So, one might assume a"BEARISH" market bias if there are more "PUT" contracts traded than "CALL" contracts.

Here's the reality, however... What the ratio does NOT make clear is that for every "PUT" or "CALL" buyer, there is a seller on the other side of the trade.

Buying a c"CALL" creates a natural"BULLISH" bias because the security must rise for the option to profit. However, when the "CALL" is bought, another trader is selling it, and the selling "CALL" options is a "BEARISH" trade.

So, when a "CALL" option is traded it has both a BUYER and a SELLER". This means that one trader expects a RISE in value, while the other trader expects a DECLINE in value creating conflicting biases on the same option contract.

Placing trades based on "MISGUIDED" assumptions can cost you money. Now you can overstand/understand why it is so important for YOU, ME, WE, the ATWWI FAMILY to follow a "SYSTEMATICs approach to profiting.

Trading Different Strategies with a Systematic Approach
I have a variety of trading strategies for generating profits and getting you "P.A.I.D."I focus on five (5) areas that allows trading opportunities nearly every week of the year:

1) Trends
2) Statistical Probability
3) Seasonality
4) Volatility
5) Contrarian

Here is the thing every area of focus has a "SYSTEMATIC" approach for profiting. My "ALGO's" searches for repeatable patterns for all of our ATWWI strategies.
Then, once my software identifies a tradable pattern, I then take the next step by determining its reliability which means going back in time to test the pattern for reliability and consistency.

You see, following the data is how successful trades are created and profits are made.
It's NOT guesswork and hope, but rather "CONSISTENCY"!!!
NO trading mechanism will produce successful trades 100% of the time, BUT by trusting the data and trading favorable odds, success is proven over time.

PEACE & BLESSINGS
Kenneth Reaves, Ph.D.

Three (3) Stock Catalysts That Will Get You "P.A.I.D."

Tuesday, January 24th, 2023
Three (3) Stock Catalysts That Will Get You "P.A.I.D."

There's a big difference between TRADING and INVESTING.
When you INVEST in a stock, you should be going in with a LONG-TERM view. You can certainly change your opinion as time goes on and events warrant it. BUT, you shouldn't plan to hold a stock for years and then get spooked by one bad earnings report (unless something extraordinary happens, like fraud).

TRADING is different. A trader is often looking for a "SPECIFIC CATALYST".

Many traders view EARNINGS REPORTS (ERs) as important catalysts. It's not uncommon to see a stock surge after the company reports a beat on quarterly earnings.

For example, Powell Industries (POWL) just announced a big earnings beat last month. It crushed earnings by an astonishing 160%, and shares jumped 20% the day the report was released.

A few days later, Hello Group (MOMO), an entertainment tech company, beat earnings by more than 20%. The stock price jumped 36% on the news.

So it's important to have "NEAR-TERM CATALYSTS" for your stock. Otherwise, you have no reason to believe the price will quickly move higher - other than that "it's a good stock," which isn't a valid rationale at all.

If there's no reason to expect a stock to jump in the near term, your investment could be "DEAD" money. It could just sit there, doing nothing. If you're putting your money to work in the market in the short term, you want the trade to be completed fairly and quickly.

Get "P.A.I.D.", get out and, move on to the next trade!!!

Listed below are a few potential catalysts that you can look for to get your stock moving quickly.

1) EARNINGS: Most companies announce their EARNING REPORT (ER) dates in press releases a few weeks before the reports come out.
If the company you are interested in has not yet announced its ER date, simply add three months to the last quarter's report date and you'll likely be pretty close.

Now is the perfect time to stock up on companies that have a track record of beating expectations.

2) ANALYST UPGRADES: When a new "BUY" or "SELL" recommendation is issued, stocks can move significantly. So I want to give my trades the best opportunity to be upgraded. To do that, I find stocks that analysts hate.
If most analysts already have "BUY" ratings on a stock, the chances of an upgrade are slim. The bandwagon is full.

BUT if most analysts rate the stock a "HOLD" or "SELL" you can sometimes get a nice move higher when they upgrade it. Look for stocks that don't have many existing "BUY" recommendations.

3) SHORT SQUEEZE: If a stock is heavily SHORTED (traders think the stock will fall, so they sell it first and buy back later), every tick higher in the price of the shares is causing pain for the SHORTS.
Eventually, when the losses get to be too much, the SHORTS exit their positions by purchasing the stock.

That creates more demand and pushes the price even higher. As the price climbs, more SHORTS buy the stock, and you can get a powerful move from all the extra demand for the shares.

Look for stocks with more than 10% of the float (the number of shares available for trading) sold SHORT.

Stocks typically don't make big moves for no reason. You need a catalyst that will PUSH your stock HIGHER in the NEAR TERM.

If you can't find one, you may want to find a different stock.

PEACE & BLESSINGS
Kenneth Reaves, Ph.D.

The Ask The Wiz Wealth Institute is not an investment advisor. We strive to be educational and informative community servants.
 

Profits And Income Daily (P.A.I.D.™)

The Ask The Wiz Wealth Institute's proprietary P.A.I.D.™ indicator system alert allows ATWWI members to maximize profits "REAL TIME" !!!

The ATWWI P.A.I.D.™ indicator system alert notifies ATWWI members via text message, anytime / 24 hours a day / per market conditions, sent directly to their cell phones, indicating both domestic and international market conditions that are monetizable for hefty profits.

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