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The 3 Best Swing Trading Strategies That Actually Work!

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In this post, you’ll learn how to use the best simple swing trading strategies, how to look for stocks to trade, and some of the best setups for generating profits.

Essentially, swing trading is a method that’s accessible to new traders, so it’s a great skill set to have in your repertoire. alt

The swing trading strategies are fairly easy to grasp, and this style of trading doesn’t require the same urgency and split-second decision making required in day trading.

For many people, swing trading is the perfect way to ease into trading, and can help build good habits that will serve you no matter which other directions your future investing takes you. 

Here’s an introduction to swing trading — what it is, how to look for stocks to trade, and some of the best setups & swing trading strategies for generating profits.

Download a PDF version of this post as PDF.

What is Swing Trading?

By ImageFlow/Shutterstock.com

First things first: What, exactly, is swing trading?

Essentially, swing trading is a method of trading where you only hold the stocks for a short period of time.

However, unlike day trading, where you move in and out of a trade within the same day, swing trading positions can last anywhere from two days to a couple of weeks.

The idea is that you’re holding on to the stock to profit from price changes or ‘swings’. These swings in the price change are where this style of trading gets its name.

Why Swing Trading?

What’s so great about swing trading? Well, several things …

First, swing trading is an accessible method for even new traders. While the pace is fast, it’s not as fast as day trading. This means that it allows a little more time to think out your process and make educated decisions with your trades.

For many, the quick pace of day trading can prove a little bit overwhelming at first. Swing Trading can be a great entry to day trading, and a strong trading practice in general. 

This doesn’t mean that it’s totally relaxed. But you’re only holding on to the stock for a few days or weeks, so it offers potential profits that exceed taking longer positions on a trade.

And since you’re only holding on to the stock for a short period of time, you can take advantage of the market volatility and potentially gain assertive profits from trades in a relatively short window.

Another benefit of the short term involved is that it allows traders to zero in on the work involved in coordinating entry and exit of the trade. Many traders find it easier to really focus on the trade at hand for the full duration of the time they hold onto the stock, since it’s relatively short lived.

Often, when you take longer positions, you can forget about the stock or it can be easy to stop being diligent, so it’s easy to lose track of what’s going on in the market and miss your opportune moment to exit the trade.

Put more bluntly, it’s easy to get lazy with longer positions. The short time period involved in swing trading helps guarantee that you’ll stay on the ball about things.

What is the Goal of Swing Trading?

Obviously, the primary goal is to earn profits. But how is that achieved?

The goal is for you to find stocks that are poised to make a movement over the course of several days, weeks or months — not just minutes or hours — and then capture these gains by trading within the trend.

To find these stocks, it’s your responsibility to employ technical analysis and research so that you can identify trends and catalysts that will ideally improve your chances of making profitable trades.

How to Profit With Swing Trading

Strategies
© 2018 Millionaire Media, LLC

To profit with swing trading, you must choose stocks with movement that will gain you profits as they fluctuate or swing in value.

The traditional model of investing is ‘buy low, sell high’. Simple as that is, it’s the most traditional way to profit.

You begin by identifying a stock that is gaining. Then you get really obsessed about it. You research the stock, pore over its chart, survey its history, and research potential catalysts that could be affecting the stock’s movement.

If, through your research, you determine that you’ve found a stock that still has room to continue gaining, you can invest, hold on to the stock for a short period of time, and determine when to sell so that you can profit.

Of course, to do this you must be disciplined and think about your entry and exit before you even trade. You’ve got to aim for the “just right” Goldilocks zone — where you don’t hold on too long, but not too short a period of time, either.

Yes, it’s easier said than done, particularly when your emotions get in the way.

You can also profit by combining short selling with swing trading. In this scenario, you’re basically going for the opposite phenomenon of the ‘buy low, sell high’ approach. You’re looking for stocks that you can try to predict losing big so that you can profit as they go down. (To learn more about short selling, check out this post.)

Whether you’re seeking gainers or losers, the most important aspect of profiting from this is choosing the right stocks.

Some of the best companies for swing trading are those with high trade volume. By volume, that means the amount of stocks that are being bought or sold each day. For swing traders, these constant price fluctuations — even if by small amounts — can be beneficial.

The market also matters. When the market is operating in an extreme, be it bullish or bearish, it can prove difficult. During extreme times, stocks aren’t as easy to track; the stability isn’t there to help you plot out a clear course of action.

In an extreme market, momentum can make stocks do things that are out of the ordinary. This makes it hard to determine patterns. Since I’m all about patterns, I don’t think those are ideal conditions.

Times of market stability are the best times for profiting from this approach. It’s when you can do solid research and determine a stock’s history and potential future. This allows you to catch short-term movements with more of a sense of security.

Determining the market sentiment can prove challenging, particularly to new traders. However, with time, practice, tons of studying, and experience, it will become easier. 

Swing Trading vs. Day Trading

Still unclear on the difference between swing trading and day trading? Let’s tackle this now, because while swing trading bears some similarities to day trading, there are several important differences.

One of the biggest differences is timing.

  • In day trading, you hold a stock for a very short period of time; it might be minutes or hours, but won’t be more than a day.
  • With swing trading, you might hold a stock for a few days to a few weeks, or even several months.

Another one of the big differences is trend awareness. In this way, swing trading can be more like trend trading, where you take a long, hard look at the fundamentals that trends play into the value of a stock, and based on that info, hold the stock. 

With swing trading, you examine any trends playing into the stock’s value and trade based on a combination of fundamental research and examining the stock’s movement and chart patterns.

3 Of The Best Swing Trade Trading Strategies

While there are endless variations of swing trading strategies, several tried-and-true setups are considered traditional swing trading strategies.

Here are some of the important ones you should know.

1.) Breakouts

The 1st of the 3 swing trading strategies is the breakout.  The breakout strategy is an approach where you take a position on the early side of the uptrend.

Here, you monitor a stock, and when it has a desired level of movement and volatility and breaks a key point of support or resistance (i.e. it falls within a defined price range), you get into the trade.

Support, resistance, and volume are key. Of course, you’ll also monitor catalysts and other factors that might affect the price of a stock — those are important  strategy facets.  

The setup is a key starting point to enter a trade and benefit from future increases in volatility and price swings.

2.) Breakdowns

The 2nd of my recommended swing strategies is known as a breakdown.  Essentially, A breakdown is the opposite of a breakout, where the stock price moves below a defined support level. With a breakdown, the chart points toward lower prices, and you monitor the same fundamentals.

3.) Options

Coming in 3rd, but not least – Swing trading with options can be a great strategy, particularly if you’re looking for leverage on your investment.

By exercising trading with options, you’re gaining the ‘option’ to buy or sell later if certain criteria are met within a defined time period. You put in a call option or a put option depending on whether you’re buying or selling. 

Only commit to the trade if your desired levels are met. For this peace of mind, you have to shell out an advance or down payment of sorts. If you don’t exercise your option within the time window specified, you’ll lose this initial payment. However, it’s less of a loss than if you made the full investment.

swing trading strategies
By ene/Shutterstock.com

Setup of a Profitable Chart

What should you look for in a profitable chart? Let’s break it down.

Moving Averages

Moving averages are an important factor in determining support and resistance levels. They can also help you determine the current climate of the market. There are two key types of moving averages.

  • Simple moving average (SMA): The SMA can help you determine the current climate of the market. Is it bullish or bearish? You can also learn support and resistance levels as well as price points, which can help you decide where and when to enter and exit a trade.
  • Exponential moving averages (EMA): This variation looks at trend signals. It can help you determine your entry and exit points based on trends, which can help further refine your entry and exit points and plot a clear-cut trading plan.

Float

A stock’s float can be influential in helping you decide whether it’s a wise investment for you.

The float is the number of shares that are available for public trading. But don’t confuse it with the shares outstanding — that figure includes restricted shares.

You’re aiming for the Goldilocks zone again here. You don’t want an excessive float, because when a massive float is happening, it’s harder for the stock to move in a way that will make you profits. A stock that has a smaller supply of shares is more likely to show more impressive action and movement.

A too-low float can also inhibit movement. If a stock isn’t highly traded, it may not be able to gain the movement you’d like.

Short Interest

Short interest can help expand your knowledge before making a swing trade. It’s a ratio that compares the number of floating shares to the number of shares short.

Often, short interest is calculated on a monthly basis, but there’s no truly accurate source of data for this so it’s more of a guessing game. It includes all shares that have been sold short.

So why does that matter? Because a high short interest may be an indication that the market is trending toward bearish with this stock. However, if the stock has a low price and a high short interest, this could be a warning sign that a short squeeze is occurring.

If a stock has a relatively high short interest that can be cross-referenced with a positive catalyst, this might give you a sign that short sellers want to cover themselves in this situation. This could affect the stock price.

Volatility

Looking at volatility is key in determining a swing trade setup. Volatility is the liability to change rapidly and unpredictably, especially for the worse.

In the stock market, volatility generally implies greater risk, which means higher odds of a loss. However, risk can also lead to reward, so it’s important to look at a stock’s volatility in conjunction with other aspects such as catalysts and other fundamental data.

5 Key Tips for Success with these Swing Trading Strategies

Here are some of my top tips for those who want to get started in this world.

1.) Limit Losses

I live and die by this rule: Cut stock losses quickly.

Obviously, I don’t want to lose anything. But if it becomes clear that a trade isn’t working, I’m quick to get out.

Say that I’m shorting a stock and expecting a morning panic the next day. If there’s no panic, yet my inbox has a press release from the company that’s serving to pump up the stock and squeeze the shorts and the stock starts going up, then I’m out.

It’s not about prospecting or holding on hoping to salvage a trade. I look to patterns, not hunches. Don’t try to be a hero — if things aren’t working out for you, in a swing trade or in any trade, cut losses.

2.) Never Risk More Than 1% Per Trade

I constantly tell my students to focus on small-but-reliable profits.

Not every trade has to be a home run. In fact, the smaller hits can add up to bigger gains over time. So I generally don’t advocate taking large positions.  

There’s a commonly held idea that traders should not risk more than 1 percent of their total account on a single trade.

If you stick to this idea, it can keep losses small. Though it might also keep gains small, they can amount over time. If you have a small account, 1 percent might be a drop in the bucket, so in this case, it could be safe to consider upping the limit to 10–20 percent. Don’t go beyond your comfort level.

3.) Mental Stops

Mental Stops
By winui/Shutterstock.com

A mental stop is the art of making an internal decision about when you’ll exit a trade or investment.

Consider a mental stop a promise that you make to yourself.

Having this plan in place and using mental stops when trading can help reduce your potential losses. If you’re able to remain true to the promise you made to yourself, it will help keep you from becoming too emotional or making bad decisions in your trade.

Mental stops can also help you cut your losses. Use them.

4.) Make Sure to Watch the Stock’s Historical Volatility

The best way to determine future volatility is to look at historical volatility. You can calculate historical volatility by using a mathematical equation. This book includes a helpful step-by-step process on how to easily do this in Excel.

To summarize the steps necessary to determine a stock’s historical volatility, here’s what you need to do:

Step 1: Assemble the historical data in a spreadsheet. Put together the stock’s past performance.

Step 2: Calculate the logarithmic returns. This might sound difficult, but it’s not. As you’ll see in the book’s tutorial, it’s just a calculation based on the ratio of closing price and the closing price the day before.

Step 3: Calculate the standard deviation. Now you calculate the deviation of the daily returns. This helps you begin to see the stock’s volatility over time.

Step 4: Annualize the historical volatility. You’ve already calculated the daily volatility. Now multiply it by the square root of the number of days of potential trading per year. Done!

5.) Stick to Your Plan

Entry, exit, research, calculating risk …

If you’ve gained anything from this post so far, hopefully it’s the fact that to find success as a swing trader, you have to be on top of your research so that you can be extremely calculated about the trade.

You must consider your entry, exit, potential losses, and to be prepared to cut losses quickly if needed.

All of this is well and good, but as I — and most traders who have been at it for a while — know, things can get emotional in the heat of a trade.

So in a way, this rule becomes more important than any other: You must stick to your plan.

Make a trading plan and stick to it. Otherwise all of your hard work can go to waste and you can suffer losses. Sure, you could learn your lesson the hard way, but why not just stick to the plan?

How Do You Shortlist Stocks from Thousands of Stocks?

There are literally myriad stocks out there competing for your attention. How do you decide which ones are worthy of your attention?

This requires time, effort, and education. The StocksToTrade software can also help — in a big way.

What Is the Best Way to Learn These Strategies?

The best method to learn the swing trading strategies l’ve covered here is by pursuing a trading education.

While this article covers the basics and might help you decide if you’re interested in pursuing this style of trading, if you really want to dive in, you’ve got to commit to educating yourself. 

Who is Timothy Sykes?

I’m a trading teacher. My college experience was probably different from yours: I turned $12,415 in Bar Mitzvah gift money into $2 million and started a hedge fund during my senior year at Tulane.

After years of trading and running a hedge fund, I came to realize that my knowledge of trading is the best thing I can offer to others.

Experience led me to create Profit.ly, a community of traders who share their performance and trades openly (see ALL my trades here) to help each other learn and improve. Moreover, there’s Investimonials.com. Check it out.

Today, I’m still a trader — but my primary focus is teaching and mentoring trading students.

Trading Challenge

While I’m best known for teaching students how to trade penny stocks, that’s far from the only thing you’ll learn in my Trading Challenge.

My goal: to teach you how to forge a sustainable, long-term career as a day trader. My team and I strive to educate you on all sorts of different trading styles so that you can diversify and remain nimble in the market.

The Bottom Line

Swing trading can be a fantastic way for new traders to get their feet wet.

While I wouldn’t go so far as to say swing trading is easy, it’s one of the easier methods of trading to wrap your head around. Many traders find the concepts easy to grasp.

But, if you consider the pace, and the fact that it often rewards routine and research, AND the potential profits, you’ll understand why this type of trading is widely considered a worthwhile trading style for old and new traders alike.

To learn more about what I’ve talked about above, consider signing up for my Trading Challenge. You’ll gain a greater education on it and much more.

Have you tried swing trading?

Let us know in the comments below!

The post The 3 Best Swing Trading Strategies That Actually Work! appeared first on Timothy Sykes.



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Coronavirus Stocks To Buy When An Outbreak Occurs

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This post is more for me than it is for you, and in no way a recommendation to buy these stocks. It is my journal listing of stocks that are moving on volume on the latest Wuhan Coronavirus scare. What do we know so far? Very little as it seems many are keeping this thing under wraps. However, more details are pointing to a more significant threat.

It’s hard to determine what is fact and fiction in this new age of “Fake News” , but here is the current Outbreak map and the RO number:

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Stocks seeing activity due to the outbreak are as follows (Highest price to lowest price): AZN, MRNA, VIR, LAKE, NNVC, NVAX, APT, ICCC, CERS, INO, AHPI, BCRX, AEMD, CODX, CBLI, LLIT

AZN – engages in the discovery, development, and commercialization of prescription medicines for the treatment of respiratory, inflammation, autoimmune, cardiovascular, metabolic, oncology, infection, neuroscience, and gastrointestinal diseases worldwide

AstraZeneca CEO Pascal Soriot told CNBC. “We have a very large presence in China, and are the number one pharmaceutical company there, we employ 16,000 people — so as you would imagine it matters to us, we really care a lot and we’ll monitor this, but it really looks like it’s contained for the time being.”

___

MRNA – Creating a new category of transformative medicines based on mRNA to improve the lives of patients. From the beginning, we designed our strategy and operations to realize the full potential value and impact of mRNA over a long time horizon across a broad array of human diseases

Note: “MRNA has received new funding from vaccine alliance CEPI to accelerate its work on a coronavirus vaccine, and it has joined forces with the Coalition for Epidemic Preparedness Innovations on a vaccine approach.”

___

VIR – a clinical-stage immunology company focused on combining immunologic insights with cutting-edge technologies to treat and prevent serious infectious diseases.

Note: “$VIR holds a portfolio that includes an antibody for another coronavirus strain, but management is testing to determine efficacy on the Wuhan strain.”

___

LAKE – The company offers limited use/disposable protective clothing, such as coveralls, lab coats, shirts, pants, hoods, aprons, sleeves, smocks, and shoe covers; high-end chemical protective suits to provide protection from highly concentrated and hazardous chemical and biological toxins; and fire fighting and heat protective apparel, which is used for the maintenance of high temperature equipment, and for military and airport crash and rescue teams.

___

NNVC – NanoViricides, Inc., a nano-biopharmaceutical company, discovers, develops, and commercializes therapeutics for the treatment of viral infections. The company is developing anti-influenza drug candidates at pre-clinical and advanced pre-clinical stage, which include two FluCide drugs comprising NV-INF-2, an oral anti-influenza drug and NV-INF-1, an injectable anti-influenza drug for novel strain of H7N9, Bird Flu H5N1, and other Highly Pathogenic Influenzas

Note: The company announced a secondary offering after the first day spike. Investors gobbled it up, buying the dip like madmen.

___

NVAX – Novavax, Inc., a clinical-stage vaccine company, focuses on discovering, developing, and commercializing recombinant nanoparticle vaccines and adjuvants. The company also has pre-clinical stage programs for various infectious diseases, including the Middle East respiratory syndrome coronavirus; and develops technology for the production of immune stimulating saponin-based adjuvants.

Note: Like NNVC, the company has already announced a secondary offering and the stock is recovering from the news.

___

APT – engages in developing, manufacturing, and marketing a line of disposable protective apparel, building supply products, and infection control products in the United States and internationally.

Note: APT is LAKE’s little cousin. They almost always move in tandem with each other.

___

ICCC –  is involved in the development of Mast Out, a Nisin-based intramammary treatment of subclinical mastitis in lactating dairy cows; and treatments that prevent E. coli K99 and bovine coronavirus, as well as calf scours caused by enteric pathogens.

___

CERS – Its INTERCEPT Blood System is based on its proprietary technology for controlling biological replication; and targets and inactivates blood-borne pathogens, including viruses, bacteria, and parasites, as well as harmful white blood cells, while preserving the therapeutic properties of platelet, plasma, and red blood cell transfusion products.

NOTE: Cowen notes that it is encouraged by prior data suggesting that Cerus’s Intercept could be an effective tool against the Coronavirus family.

___

INO – a clinical stage biopharmaceutical company, develops active DNA immunotherapies and vaccines in combination with proprietary electroporation delivery devices to prevent and treat cancers and infectious diseases.

NOTE: “INO is developing a vaccine to treat the MERS strain of coronavirus, management may be able to contribute its research toward the Wuhan coronavirus effort.”

___

AHPI – Allied Healthcare Products, Inc. engages in the manufacture, marketing, and distribution of various respiratory products for a range of hospital and alternate site settings to the health care industry in the United States, Europe, Canada, Latin America, the Middle East, the Far East, and internationally.

Note: A sleeper Coronavirus play that popped up after traders started searching for companies that had products to treat respiratory problems. The stock was halted on Friday for a few mintues as traders rushed to buy up shares.

___

BCRX – a biotechnology company, designs, optimizes, and develops small molecule drugs that block key enzymes involved in the pathogenesis of diseases

NOTE: galidesivir is in a Phase 1 study for a range of viruses, including coronaviruses. The early stage of development may prohibit material contribution in the immediate outbreak, but BioCryst may be able to lend some useful data.

___

AEMD – a medical device company, focuses on creating devices for the treatment of cancer, infectious diseases, and other life-threatening conditions. It develops Aethlon Hemopurifier, a medical device that targets the elimination of circulating viruses and tumor-secreted exosomes that promote cancer progression.

___

CODX – is a molecular diagnostics company that has developed and intends to manufacture and sell reagents used for diagnostic tests that function via the detection and/or analysis of nucleic acid molecules (DNA or RNA), and to sell diagnostic equipment from other manufacturers as self-contained lab systems.

NOTE: Similar to NNVC & NVAX, the company issued a secondary offering right after the one day spike. Investors gobbled up the dip quick on Friday.

____

CBLI – a biopharmaceutical company, focuses on developing pharmaceuticals designed to address diseases with unmet medical need.

__

LLIT – offers medical devices, including medical ventilators, general hospital products, medical compressors, and wireless medical products, as well as related supporting products.

NOTE: Similar to AHPI, the stock was halted serval times as traders went down the food chain for respirator products.

___

Feel free to add tickers to this list in the comment section.



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Stock Market Week Ahead for the trading week beginning January 27th, 2020

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Good Saturday afternoon to all of you here on r/StockMarket. I hope everyone on this sub made out pretty nicely in the market this past week, and is ready for the new trading week ahead.

Here is everything you need to know to get you ready for the trading week beginning January 27th, 2020.

After virus scare, markets look to Fed rate policy to keep stock rally going – (Source)


With stocks coming off their first losing week of the year, investors will be looking for the Federal Reserve to soothe markets by reaffirming its position that interest rates will be low for a long time into the future.


The outbreak of the coronavirus in China in the past week took the steam out of a market that has been repeatedly rallying to new highs since December. The S&P 500 fell just about 1% for the week, amid fears the virus could lead to slower growth not only in China, but across the globe.


Those concerns could continue to spook markets in the coming week, but stocks should be buffeted by the Fed’s anticipated commitment to low rates and its current Treasury bill buying program. The Fed meets Tuesday and Wednesday. Fed Chairman Jerome Powell is expected to emphasize that the Fed remains on a neutral policy path and that would only change if there was a significant change in the economic outlook.


There are also some major earnings reports, including from Apple, which hit an all-time high Friday morning before closing lower with the broader market. It could have a big impact on sentiment and help influence trading across the technology sector.


Stocks were choppy in the past week, and Treasury yields have been sinking on worries about the new virus. The 10-year yield sunk to a Nov. 1 low of 1.68% and investors drove gold prices higher in a flight-to-safety trade.


“It’s overshadowing everything, and what the market is looking for is that the Chinese are containing it, and the spread is minimal,” said Quincy Krosby, chief market strategist at Prudential Financial. “The derivative of all of this is what does it do to growth? Traders and investors are hoping the stimulus that has been introduced into the Chinese economy is going to take hold, and this is not going to halt that turnaround.”


Krosby said the market has been looking for an excuse to pull back. The S&P 500 ended the week at 3,295, off 1%, but it is still up about 2% for the year so far.


“You could see going into the weekend the 10-year Treasury yield is down, gold is higher, the market is in a text book defensive state,” said Krosby. “We had a market that was poised for a bout of profit-taking and this is it.”


Earnings roll out

There are more than 135 S&P companies reporting earnings in the week ahead, with a heavy focus on technology, industrials and consumer stocks. Apple reports Tuesday, and Microsoft and Facebook are Wednesday. Boeing and General Electric report Wednesday, while McDonald’s releases results Wednesday. On Friday, big oil reports with ExxonMobil and Chevron expected.


Earnings reports so far have been mostly better than expected, with 68.2% of companies beating earnings per share estimates, according to Refinitiv. Earnings are expected to be down about a half percent for the fourth quarter, based on actual reports and estimates of companies yet to report.


“Coming into any earnings season with stocks at all time highs is fraught with peril,” said Art Hogan, chief market strategist at National Securities. “It’s precarious because you have the opportunity for outsized moves if you miss earnings, revenues or guidance.”


Hogan said companies may be able to give a better indication of the future, now that there’s a first phase trade deal between the U.S. and China. He said markets will also be looking for guidance from China and elsewhere on whether the virus appears to be containable or not.


Fed is big story but won’t say much

The Federal Reserve is not likely to say much has changed in its outlook, except that it’s last three interest rate cuts may have helped the economy and financial conditions.


“The big news is just talk on the balance sheet. I think that’s going to be the key messaging,” said Jim Caron, portfolio strategist at Morgan Stanley Investment Management. “I think the data has been okay. There’s really nothing new there. The only thing that’s really new or interesting is going to be what’s going on with the balance sheet.”


The Fed has been buying about $60 billion in Treasury bills each month to expand its balance sheet, ending a program where it was shrinking the balance sheet. The Fed is adding reserves to end a problem in the repo market, which is basically the plumbing of the financial markets where institutions go to get short term cash.


Many traders believe the program is adding liquidity to markets, and therefore driving investors into stocks.


Mark Cabana, head of short rate strategy at BofA Securiteis, said the Fed is not changing its benchmark fed funds target rate, but the fixed income market has been expecting the Fed to make a technical adjustment to another rate. He said the fed funds rate, trading at about 1.55%, has come to the lower end of the Fed’s target range of 1.5 to 1.75%.


For that reason it is likely to raise the interest rate on excess reserves by five basis points. “The intent is to affirm the bottom end of the Fed’s target range, ” he said.


Besides the technical move, they “may be will provide a little more guidance on what it would take to vote rates one way or the other,” he said.


Economic data

There’s an important data calendar in the coming week, including the first look at the fourth quarter’s gross domestic product on Thursday. Personal income and spending data is Friday, and that includes the personal consumption expenditure inflation deflator, watched by the Fed.


New home sales could continue the string of positive news in housing, when they are released Monday, and there are durable goods Tuesday.


This past week saw the following moves in the S&P:

(CLICK HERE FOR THE FULL S&P TREE MAP FOR THE PAST WEEK!)

Major Indices for this past week:

(CLICK HERE FOR THE MAJOR INDICES FOR THE PAST WEEK!)

Major Futures Markets as of Friday's close:

(CLICK HERE FOR THE MAJOR FUTURES INDICES AS OF FRIDAY!)

Economic Calendar for the Week Ahead:

(CLICK HERE FOR THE FULL ECONOMIC CALENDAR FOR THE WEEK AHEAD!)

Sector Performance WTD, MTD, YTD:

(CLICK HERE FOR FRIDAY'S PERFORMANCE!)
(CLICK HERE FOR THE WEEK-TO-DATE PERFORMANCE!)
(CLICK HERE FOR THE MONTH-TO-DATE PERFORMANCE!)
(CLICK HERE FOR THE 3-MONTH PERFORMANCE!)
(CLICK HERE FOR THE YEAR-TO-DATE PERFORMANCE!)
(CLICK HERE FOR THE 52-WEEK PERFORMANCE!)

Percentage Changes for the Major Indices, WTD, MTD, QTD, YTD as of Friday's close:

(CLICK HERE FOR THE CHART!)

S&P Sectors for the Past Week:

(CLICK HERE FOR THE CHART!)

Major Indices Pullback/Correction Levels as of Friday's close:

(CLICK HERE FOR THE CHART!

Major Indices Rally Levels as of Friday's close:

(CLICK HERE FOR THE CHART!)

Most Anticipated Earnings Releases for this week:

(CLICK HERE FOR THE CHART!)

Here are the upcoming IPO's for this week:

(CLICK HERE FOR THE CHART!)

Friday's Stock Analyst Upgrades & Downgrades:

(CLICK HERE FOR THE CHART LINK #1!)
(CLICK HERE FOR THE CHART LINK #2!)
(CLICK HERE FOR THE CHART LINK #3!)
(CLICK HERE FOR THE CHART LINK #4!)

February Almanac: Weak Link in Best Six Months

Even though February is right in the middle of the Best Six Months, its long-term track record, since 1950, is rather tepid. February ranks no better than sixth and has posted meager average gains except for the Russell 2000. Small cap stocks, benefiting from “January Effect” carry over; tend to outpace large cap stocks in February. The Russell 2000 index of small cap stocks turns in an average gain of 1.2% in February since 1979—just the sixth best month for that benchmark.

A strong February in 2000 boosts NASDAQ and Russell 2000 rankings in election years. Otherwise, February’s performance, compared to other presidential-election-year months, is mediocre at best with no large-cap index ranked better than seventh (DJIA and S&P 500 since 1950, Russell 1000 since 1979).

(CLICK HERE FOR THE CHART!)

Solid January Starts Not Rare, February Could Be Tepid

Bullish sentiment is running high and why not. A new decade has begun, January has been bucking the recent trend of volatile performance and the market is trading at or near all-time record highs. Big round numbers like 29000, 3300 and 9000 are also emotionally satisfying. Our Santa Claus Rally and First Five Days indicators were both positive and the market is well on its way to completing a historically bullish January Trifecta. A positive January Barometer is all that remains to complete the January Trifecta.

As of yesterday’s close DJIA was up 2.3% year-to-date. S&P 500 was up 2.79% and NASDAQ stood at 4.44%. Although these gains are above average, they are actually not all that uncommon by the thirteenth trading day of the New Year. Since 1901 (119 years), DJIA has been up 2.3% or more on the thirteenth trading day 33 times before this year. DJIA’s largest gain on the thirteenth trading day was 11.4% in 1976 (+17.9% for the full-year). S&P 500 has equaled or exceeded 2.79% on the thirteenth trading day 26 times since 1930 while NASDAQ has bested 4.44% 15 times since 1971. Depending on index, gains equal to or greater than this year come about approximately once every 3.3 to 3.6 years. 2012 was the last election year where all three indexes were up more on the thirteenth trading day than this year.

In the following Seasonal Patten Charts of DJIA, S&P 500 and NASDAQ, we compare 2020 (as of yesterday’s close) to All Years and Election Years. Here it is clear that the market has gotten off to a solid start with well above average gains so far. Throughout 2019, the market tracked its historical patterns quite closely which suggests some mean reversion could occur this February as the month has been historically tepid for DJIA and S&P 500.

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Another Look At Election Years

Last week in our LPL Research blog, we took a closer look at how stocks have performed during an election year. We found that since 1940, the S&P 500 Index hasn’t been lower during an election year when an incumbent president has been up for reelection.

We’ve had many requests to look more into election years, so we thought we’d take another look at this impactful year.

The S&P 500’s track record for reelection years has been impressive, but its average path during these years has been quite interesting, as shown in the LPL Chart of the Day. In ten reelection years since 1950, the S&P 500 on average has barely budged from February through June, before breaking out in the second half of the year.

“Stocks actually have traded in a tight range from February through June during election years, with the big rally taking place during the second half of the year,” explained LPL Financial Senior Market Strategist Ryan Detrick.

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From a quarterly view, the S&P 500 has historically posted modest returns in the four quarters of an election year, but the benchmark has been higher an impressive 82% of the time in the fourth quarter of all election years. That’s one of the best track records of any quarter in the four-year presidential cycle.

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Recession Watch Update

As the economic expansion caps its first decade, we thought it’d be a good time to check on LPL Research’s leading indicators in our Recession Watch Dashboard.

As you can see in our latest update and in the LPL Chart of the Day, the overall view hasn’t changed much. We believe we are in the later stages of this economic expansion, but we still see little threat of imminent recession. The current expansion is the longest on record, at 126 months, but the economy has grown at a slow and steady rate. We believe this measured pace, along with supportive fiscal policy, has contributed to this cycle’s continued durability.

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In the fourth quarter, the needle moved in different directions for two of our five forecasters:

We removed the U.S. Treasury Yield Curve from On Watch status as the spread between the 3-month and 10-year yields moved back into positive territory. The spread between the 2-year and 10-year yields also climbed to an 18-month high following the Federal Reserve rate cuts. Going back to 1955, a yield curve inversion (long-term yields falling below short-term yields) has preceded each of the nine recessions. It’s important to note, however, that parts of the curve flickered between positive and inverted territory several times before the actual recession occurred.

We added Market Valuations to On Watch status, as the S&P 500 Index trailing price-to-earnings (P/E) ratio rose near cycle highs. The P/E ratio is now comfortably above our 2020 target of 18.75. With the S&P 500 surpassing the upper end of our year-end fair value target of 3,300, we are watching closely to see if earnings growth is strong enough to justify these elevated valuations. The low interest-rate and inflation environment continue to be strong tailwinds for market valuations.

“We remain optimistic of continued, albeit possibly slower, economic growth in the United States in the coming year, bolstered by recent progress on the U.S.-China trade deal,” said LPL Financial Chief Investment Strategist John Lynch. “While we continue to monitor the indicators closely, at the present time, we see only a modest chance of recession starting within the next year.”


STOCK MARKET VIDEO: Stock Market Analysis Video for Week Ending January 24th, 2020

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STOCK MARKET VIDEO: ShadowTrader Video Weekly 1.26.20

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Here are the most notable companies (tickers) reporting earnings in this upcoming trading week ahead-


  • $AAPL
  • $TSLA
  • $AMD
  • $AMZN
  • $MSFT
  • $FB
  • $BA
  • $GE
  • $MA
  • $T
  • $V
  • $SBUX
  • $PYPL
  • $MCD
  • $LMT
  • $MMM
  • $DHI
  • $PFE
  • $UTX
  • $KO
  • $UPS
  • $S
  • $NURO
  • $HMST
  • $VZ
  • $HCA
  • $XLNX
  • $ARNC
  • $XOM
  • $CAT
  • $BX
  • $PGR
  • $LRCX
  • $GD
  • $PHM
  • $NVR
  • $PII
  • $SALT
  • $BIIB
  • $NOW
  • $ANTM
  • $NUE
  • $ALK
  • $PLUG
  • $MPC

(CLICK HERE FOR NEXT WEEK'S MOST NOTABLE EARNINGS RELEASES!)
(CLICK HERE FOR NEXT WEEK'S HIGHEST VOLATILITY EARNINGS RELEASES!)
(CLICK HERE FOR MOST ANTICIPATED EARNINGS RELEASES FOR THE NEXT 5 WEEKS!)

Below are some of the notable companies coming out with earnings releases this upcoming trading week ahead which includes the date/time of release & consensus estimates courtesy of Earnings Whispers:


Monday 1.27.20 Before Market Open:

(CLICK HERE FOR MONDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)

Monday 1.27.20 After Market Close:

(CLICK HERE FOR MONDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!)

Tuesday 1.28.20 Before Market Open:

(CLICK HERE FOR TUESDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)

Tuesday 1.28.20 After Market Close:

(CLICK HERE FOR TUESDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!)

Wednesday 1.29.20 Before Market Open:

(CLICK HERE FOR WEDNESDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)

Wednesday 1.29.20 After Market Close:

(CLICK HERE FOR WEDNESDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!)

Thursday 1.30.20 Before Market Open:

(CLICK HERE FOR THURSDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES LINK #1!)
(CLICK HERE FOR THURSDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES LINK #2!)

Thursday 1.30.20 After Market Close:

(CLICK HERE FOR THURSDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!)

Friday 1.31.20 Before Market Open:

(CLICK HERE FOR FRIDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)

Friday 1.31.20 After Market Close:

(CLICK HERE FOR FRIDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!)

Apple, Inc. $318.31

Apple, Inc. (AAPL) is confirmed to report earnings at approximately 4:30 PM ET on Tuesday, January 28, 2020. The consensus earnings estimate is $4.53 per share on revenue of $87.74 billion and the Earnings Whisper ® number is $4.80 per share. Investor sentiment going into the company's earnings release has 74% expecting an earnings beat The company's guidance was for earnings of $4.18 to $4.66 per share. Consensus estimates are for year-over-year earnings growth of 8.37% with revenue increasing by 4.07%. Short interest has decreased by 5.2% since the company's last earnings release while the stock has drifted higher by 28.7% from its open following the earnings release to be 39.6% above its 200 day moving average of $227.94. Overall earnings estimates have been revised higher since the company's last earnings release. On Friday, January 24, 2020 there was some notable buying of 10,425 contracts of the $320.00 call expiring on Friday, January 31, 2020. Option traders are pricing in a 5.4% move on earnings and the stock has averaged a 4.8% move in recent quarters.

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Tesla, Inc. $564.82

Tesla, Inc. (TSLA) is confirmed to report earnings at approximately 4:55 PM ET on Wednesday, January 29, 2020. The consensus earnings estimate is $2.03 per share on revenue of $6.99 billion and the Earnings Whisper ® number is $2.24 per share. Investor sentiment going into the company's earnings release has 43% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 6.84% with revenue decreasing by 3.26%. Short interest has decreased by 27.2% since the company's last earnings release while the stock has drifted higher by 87.7% from its open following the earnings release to be 100.1% above its 200 day moving average of $282.24. Overall earnings estimates have been revised higher since the company's last earnings release. On Thursday, January 9, 2020 there was some notable buying of 12,168 contracts of the $700.00 call expiring on Friday, June 19, 2020. Option traders are pricing in a 12.8% move on earnings and the stock has averaged a 10.2% move in recent quarters.

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Advanced Micro Devices, Inc. $50.35

Advanced Micro Devices, Inc. (AMD) is confirmed to report earnings at approximately 4:15 PM ET on Tuesday, January 28, 2020. The consensus earnings estimate is $0.31 per share on revenue of $2.10 billion and the Earnings Whisper ® number is $0.32 per share. Investor sentiment going into the company's earnings release has 71% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 287.50% with revenue increasing by 47.99%. Short interest has decreased by 34.0% since the company's last earnings release while the stock has drifted higher by 52.9% from its open following the earnings release to be 48.5% above its 200 day moving average of $33.91. Overall earnings estimates have been unchanged since the company's last earnings release. On Thursday, January 9, 2020 there was some notable buying of 16,799 contracts of the $60.00 call expiring on Friday, February 21, 2020. Option traders are pricing in a 9.7% move on earnings and the stock has averaged a 10.5% move in recent quarters.

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Amazon.com, Inc. –

Amazon.com, Inc. (AMZN) is confirmed to report earnings at approximately 4:00 PM ET on Thursday, January 30, 2020. The consensus earnings estimate is $3.98 per share on revenue of $86.00 billion and the Earnings Whisper ® number is $4.15 per share. Investor sentiment going into the company's earnings release has 71% expecting an earnings beat The company's guidance was for revenue of $80.00 million to $86.00 million. Consensus estimates are for earnings to decline year-over-year by 35.18% with revenue increasing by 18.81%. Short interest has increased by 22.4% since the company's last earnings release while the stock has drifted higher by 9.7% from its open following the earnings release to be 2.0% above its 200 day moving average of $1,824.47. Overall earnings estimates have been revised lower since the company's last earnings release. On Tuesday, January 21, 2020 there was some notable buying of 1,348 contracts of the $1,862.50 put expiring on Friday, January 31, 2020. Option traders are pricing in a 4.5% move on earnings and the stock has averaged a 3.2% move in recent quarters.

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Microsoft Corp. $165.04

Microsoft Corp. (MSFT) is confirmed to report earnings at approximately 4:10 PM ET on Wednesday, January 29, 2020. The consensus earnings estimate is $1.32 per share on revenue of $35.69 billion and the Earnings Whisper ® number is $1.38 per share. Investor sentiment going into the company's earnings release has 87% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 20.00% with revenue increasing by 9.91%. Short interest has increased by 18.2% since the company's last earnings release while the stock has drifted higher by 18.9% from its open following the earnings release to be 18.6% above its 200 day moving average of $139.21. Overall earnings estimates have been revised higher since the company's last earnings release. On Tuesday, January 14, 2020 there was some notable buying of 11,176 contracts of the $165.00 call expiring on Friday, April 17, 2020. Option traders are pricing in a 4.0% move on earnings and the stock has averaged a 2.5% move in recent quarters.

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Facebook Inc. $217.94

Facebook Inc. (FB) is confirmed to report earnings at approximately 4:05 PM ET on Wednesday, January 29, 2020. The consensus earnings estimate is $2.51 per share on revenue of $20.83 billion and the Earnings Whisper ® number is $2.63 per share. Investor sentiment going into the company's earnings release has 83% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 5.46% with revenue increasing by 23.15%. Short interest has increased by 2.4% since the company's last earnings release while the stock has drifted higher by 10.8% from its open following the earnings release to be 14.2% above its 200 day moving average of $190.86. Overall earnings estimates have been revised lower since the company's last earnings release. On Tuesday, January 14, 2020 there was some notable buying of 9,443 contracts of the $200.00 put expiring on Friday, February 7, 2020. Option traders are pricing in a 5.8% move on earnings and the stock has averaged a 7.2% move in recent quarters.

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Boeing Co. $323.05

Boeing Co. (BA) is confirmed to report earnings at approximately 7:30 AM ET on Wednesday, January 29, 2020. The consensus earnings estimate is $1.73 per share on revenue of $21.67 billion and the Earnings Whisper ® number is $1.40 per share. Investor sentiment going into the company's earnings release has 2% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 68.43% with revenue decreasing by 23.54%. Short interest has increased by 8.9% since the company's last earnings release while the stock has drifted lower by 6.4% from its open following the earnings release to be 8.7% below its 200 day moving average of $353.77. Overall earnings estimates have been revised lower since the company's last earnings release. On Friday, January 24, 2020 there was some notable buying of 7,609 contracts of the $330.00 call expiring on Friday, January 31, 2020. Option traders are pricing in a 5.0% move on earnings and the stock has averaged a 2.1% move in recent quarters.

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General Electric Co. $11.71

General Electric Co. (GE) is confirmed to report earnings at approximately 6:00 AM ET on Wednesday, January 29, 2020. The consensus earnings estimate is $0.18 per share on revenue of $26.16 billion and the Earnings Whisper ® number is $0.20 per share. Investor sentiment going into the company's earnings release has 70% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 14.29% with revenue decreasing by 21.39%. Short interest has decreased by 24.1% since the company's last earnings release while the stock has drifted higher by 19.7% from its open following the earnings release to be 15.0% above its 200 day moving average of $10.18. Overall earnings estimates have been revised lower since the company's last earnings release. On Monday, January 13, 2020 there was some notable buying of 18,933 contracts of the $11.00 call expiring on Friday, February 21, 2020. Option traders are pricing in a 7.2% move on earnings and the stock has averaged a 6.9% move in recent quarters.

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Mastercard Inc $323.67

Mastercard Inc (MA) is confirmed to report earnings at approximately 8:00 AM ET on Wednesday, January 29, 2020. The consensus earnings estimate is $1.87 per share on revenue of $4.39 billion and the Earnings Whisper ® number is $1.89 per share. Investor sentiment going into the company's earnings release has 81% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 20.65% with revenue increasing by 15.31%. Short interest has increased by 12.0% since the company's last earnings release while the stock has drifted higher by 16.6% from its open following the earnings release to be 18.7% above its 200 day moving average of $272.70. Overall earnings estimates have been revised higher since the company's last earnings release. On Wednesday, January 15, 2020 there was some notable buying of 2,162 contracts of the $200.00 put expiring on Friday, January 15, 2021. Option traders are pricing in a 3.5% move on earnings and the stock has averaged a 2.2% move in recent quarters.

(CLICK HERE FOR THE CHART!)


AT&T Corp. $38.50

AT&T Corp. (T) is confirmed to report earnings at approximately 6:50 AM ET on Wednesday, January 29, 2020. The consensus earnings estimate is $0.87 per share on revenue of $46.97 billion and the Earnings Whisper ® number is $0.88 per share. Investor sentiment going into the company's earnings release has 63% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 1.16% with revenue decreasing by 2.13%. The stock has drifted higher by 0.5% from its open following the earnings release to be 8.0% above its 200 day moving average of $35.63. Overall earnings estimates have been revised lower since the company's last earnings release. On Wednesday, January 8, 2020 there was some notable buying of 5,621 contracts of the $42.00 call expiring on Friday, April 17, 2020. Option traders are pricing in a 3.9% move on earnings and the stock has averaged a 4.8% move in recent quarters.

(CLICK HERE FOR THE CHART!)


DISCUSS!

What are you all watching for in this upcoming trading week?


I hope you all have a wonderful weekend and a great trading week ahead r/StockMarket.

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How to Turn $2,000 Into $10,000 Using a TFSA

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If you have a TFSA, then congratulations. You’ve made the single best decision you could make when it comes to financial planning. With tax-free growth and withdrawals, TFSAs are the best deal in Canada.

But having a TFSA is only the first step. Next, you need to build wealth through regular contributions and prudent investing. Fortunately, these actions are easier than most people realize.

In fact, going from $2,000 in your TFSA to $10,000 is a pretty straightforward endeavour. All you need is time, a bit of math, and the right stocks.

Do the math

There are only a few ways to increase your wealth. Most people know that contributing more money and earning a higher rate of return are big factors. The biggest factor, however, is time.

You’re likely familiar with compound interest. Einstein reportedly called it one of the most powerful forces in the universe. But compound interest only works with time.

Let’s assume you have $2,000 in your TFSA and never contribute another cent. By earning 8% per year, how quickly will it become $10,000? After five years, you’ll have $3,000. That’s not great. After 10 years, you’ll have $4,300.

Are you starting to see the magic of compound interest? Over the first five years, you made a profit of $1,000. Over the next five years, your profit totaled $1,300. Your money is growing faster the more that time passes.

In total, it will take 21 years to reach $10,000. That’s a long time, but here’s the catch: you can accelerate the process with small contributions.

What if you started with $2,000, earned 8% per year, but also contributed an additional $100 per month? That’s only $25 each week. In this scenario, it would only take five years to hit $10,000. That’s a lot better than 21 years!

Combining the power of compound interest with regular contributions is a sure-fire way to accrue a fortune. You just need to stay diligent.

Pick your stocks

How can you earn 8% annual returns? If you have a TFSA, one of your best options is pipeline stocks.

Pipelines are pure middlemen. They charge energy companies based on the volumes they transport. It doesn’t matter where commodity pricing goes, pipelines will profit all the same.

This stability allows pipeline stocks to pay industry-leading dividends that have proven resilient for decades.

Inter Pipeline, for example, pays a 7.7% dividend. Because these distributions are completely tax free in a TFSA, you can meet your invest goals through the dividend alone. Over the last decade, however, shares have also tripled in value. Continued capital gains would only accelerate your path to a $10,000 TFSA.

Enbridge is another ideal option with a dividend yield of 6%. As the largest pipeline company on the continent, Enbridge has structural cost advantages that few competitors possess. Its scale also affords it bargaining power. On new pipelines, Enbridge wants customers to agree to 10-year contracts. That should give it unparalleled cash flow visibility, fueling future dividend growth.

Set everything in motion

Going from a $2,000 TFSA to a $10,000 TFSA is simple. Run the math, establish a regular contribution schedule, and choose resilient dividend stocks like Inter Pipeline and Enbridge. Protecting these dividends from taxes is an opportunity you shouldn’t pass up. From there, all you need to do is wait.

Special ‘Tax Credit’ Stocks Revealed in FREE New Report

There’s nothing better to an income investor than the sight of dividends rolling into your account. But the old saying goes there are two things certain in life – death and taxes… and the latter can result in some of those precious dividends slipping through your fingers and into the taxman’s pocket!

But did you know that dividends from Canadian-based companies are eligible for special tax credits? For further details on this – and to find out the name of the single most tax-efficient account to hold your US stocks in! – simply click the link below to grab your free copy of our new report…

Claim your free report now!

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The Motley Fool owns shares of and recommends Enbridge. Fool contributor Ryan Vanzo has no position in any stocks mentioned. 



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