One thing about Doug Kass, is that he is willing to stick his neck out. But it sure seems he will get it cut off this time. I don’t know why he says that the advance is narrowing; instead, I see that it is rotating and broadening which is very bullish as sectors left behind are now beginning to catch up. If the break above 1000 on the SPY holds, as it did today, for another couple days (William O’Neil of IBD says 4 days are needed to confirm a breakout), it will probably head up to 1100 on its way to 1300. I don’t know if it can get there by year end, but there are some that do.

Leadership is narrowing, speculative stocks are erupting, and shorts are pulling their hair out.~I still say the advance has a relatively small and finite life now….

A burgeoning fiscal deficit and the financial instability of our state and local municipalities are among two of the most significant of a number of nontraditional headwinds that consumers, corporations and investors face in the future. Though the bulls generally agree with these intermediate-term challenges (especially the spiraling deficit and a nervous U.S. dollar stalemate), they generally dismiss them both over the short term, favoring the belief that the current upside surprises in earnings will dominate the market landscape in influence.

I would argue that the aforementioned challenges are ever more predictable in consequence and will serve as a governor to further gains in market valuations. Not only are they inhibiting but they are also potentially oppressive influences that have been too readily put on the back burner in the face of a relentless market advance over the last five months.

An avalanche of spending by the public sector is now following an avalanche of spending by the private sector. In essence, we are (perhaps necessarily) fighting the slowdown with the same sort of incendiary kerosene that put us into the mess.

Profligate spending comes at a cost, a cost that we will experience sooner than later. - Doug Kass, August 3, 2009

There was a big move in financials and RE the past two days. Industrials are also perking up (I made a quick profit on Fluor, but would now like to get a little more before earnings on Monday). GE is both an industrial and a financial, so it has done very nicely the past 10 days, going from $12 to $14, which is almost a 20% move. I am adding to GE. Its 200 day EMA is 14.93 and if it breaks that barrier, I see it going to $20. I am using call options to add to my position (GEWLA). I also sold the Sept $17 puts today for $3.10.

Another stock to look at is the ETF for industrials: XLI. I sold puts on that today, but would also look at buying the stock or buying calls. Industrials are early cyclicals and are just now starting to move. Rather than buy BAC, I am adding to UYG by purchasing March 2010 calls at the $6 strike. UYG has a lot of BAC in it, plus the other big financial names like JPM, WFC and USB. They are at $0.70 a contract right now. If UYG goes to $10 by Jan. 1 (it was $20 last Sept), the return will be $3 on a $0.70 investment per share, which is a 400% return. But if it goes to $10, I will probably hold it till expiration because I think it might go back up to $20 while BAC is moving from $15 to $30.

Kass is stuck on his huge multi-year trading range theme (800 - 1000 on the SP500), just like Bill Gross. But if the Feds continue to support the economy and the Asian market continues its great growth and puts demand on our exports, there is no reason that the RE sector can’t repair itself and unemployment can’t move back down to around 6-7% over the next 12-18 months. That will ruin the bear arguments and will support a 1300 market as earnings continue to come back.

Keep an eye on the Feds. They are most important in the next 12 months in the market.

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Penny stocks is the new hot thing. Since the major markets crashed in late 2008, smart investors had to venture into new territory to find good trading opportunities. The days of being safe in the major markets came to a crashing end and companies that we all though will never fold, got wiped out - even after millions of dollars of government funding to try and save them. Two years ago most traders would have laughed at the mere thought of trading penny stocks, but in the current economic climate it’s become a real opportunity.

The stocks are different. If you try and trade them using your normal trading strategies you might end up burning your fingers. Trading them successfully can be a bit of a steep learning curve, but in the end the rewards may just be worth it.

There are 3 main reasons why a penny stock is not an ideal investment. Let’s briefly look at the 3 main reasons why you should not trade them:

1. Penny stocks are stocks of speculative companies

With stock prices between 10 cents and two dollars, the main aim of these companies is to get venture capital. They have great ideas and big dreams, but they need investment to realize their ideas and products. Unfortunately, like many entrepreneurs their dreams can be too big for their abilities and they often fold even before their companies start doing business.

2. Penny stock companies have no revenue and no profit

Because these companies are mostly start up ventures, most of them are note even doing business yet. Without products they probably don’t have any real fundamentals to look at. A lack of company information can mean a very risky trade and if you haven’t got any fundamental analysis in place, picking these stocks can be a bit of a blind man’s game with dire consequences.

3. Penny stock companies are often ahead of their time

Penny stock companies are often companies with some sort of advanced technology that’s not yet in the mainstream. Chances are that they could not get sufficient funding via conventional means simply because their product is something completely new. A good example of this was back in the dot com boom of the late 1990’s when a lot of internet technologies was born from “wacky ideas”. This made a lot of traders and entrepreneurs very wealthy - even though the whole bubble burst soon after. Sometimes these technologies never come off the ground - leaving you out of your investment and your money.

Nevertheless, penny stocks can be a great way to make money trading. Despite the risks, the opportunities are huge and with a little education and some persistence you can make returns unlike anything you will ever get on the major markets with overpriced stocks. The key is to learn the ins and outs of trading these stocks and to trade them well and with caution. Follow the rules and eliminate as much risk as possible. In the end trading penny stocks still offer a great opportunity and with very little capital you can make some great returns.

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All investments carry risk. This is probably the first lesson you will learn from any good investment book, course or teacher. The whole risk-reward dynamic is a very important concept that you have to understand before you even start trading. When it comes to trading pennystocks then the prevailing opinion is that they are high risk stocks to trade.

Although this is definitely true, there is more to it. Legendary investor and trader extraordinaire Warren Buffet once said that “risk comes from not knowing what you are doing”. A very good warning indeed. So often we tend to see something as risky simply because it is considered risky.

Who would ever have thought that a “risk free” stock like General Motors or Ford will ever become as unstable as they have in 2009? The fact remains that all investments have risk attached to them, but without risk there can be no reward.

I believe that penny stocks and small cap stocks have great opportunity and despite the risk warnings, we can really trade them with great leverage. Here are 5 simple steps you can take to significantly reduce and even eliminate the great risk that so many traders warn against when trading penny stocks.

1. Never trade on “hot tips” from a friends friend who knows a trader.
This has been the downfall of many inexperienced traders who think they get an inside scoop while they are just being suckered by market hype. Be careful who you listen to and only trade “hot stocks” that you find yourself.

2. Don’t get carried away
With penny stocks being so cheap and the promise of massive returns so tempting, we can easily get carried away. You know when you make little sums in your head - calculating how much you can make before you even trade the stock. Never assume and keep your emotions in check. When you get too involved emotionally you will make mistakes and break your own trading rules.

3. Never trade blindly
For some reason many traders ignore good trading principles with penny stock trading. Although the rules are slightly different, you should always keep your focus on making good trades based on solid decisions. Look at the graphs and analyze the patterns and trends. Let the trends guide you, not your hunches.

4. Never count on a sure-thing
You should trade every stock with a neutral frame of mind. Never bank all your hopes on a stock being “the one”. As a rule of thumb you should never trade more than 20% of your trading account on a single stock. This way your emotions won’t run away from you and if (as is most often the case) you lose your good sense temporarily you won’t lose more than you can afford to.

5. Be responsible for your own trades
The old saying that no one cares as much about your money as you hold true for trading. There’s a lot of websites out there offering to trade “for you” - all you have to do is hand over your money. Be very careful. In the end you are the only one who can really be responsible. Get all the help and advice you can handle, but make sure that you are fully in command of your money and your trades.

By applying these five simple rules you can greatly eliminate the risk involved in trading penny stocks. If you combine this with some good solid stock picking techniques you can do very well with small cap stocks. In the end they are good investments. They are cheap and can give you buying power unlike any other investment out there. Stick with it, educate yourself and be smart.

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Most traders have had the painful experience of setting their stops only to have the price retrace to their stop before continuing in the trend. Although some traders swear that other traders are “running the stops,” actually what happened is the trader placed the stop too tight.

You must remember that stops are there for one simple reason; to preserve your capital in case the market goes against you. If you are placing your stops too close, chances are you are consistently being stopped out and not consistently taking money out of the market. For example, a tight stop would have taken you out multiple times within the three separate trends. However, with the ETF Trend Trading stops, Channel Exits and Swing Trailing Stop Strategies; most of the time you actually stay in the trend, enabling you to take your profits near the end of the trend.

By allowing your stops to breathe with the market, you stay in your trade longer, thereby profiting from the bigger moves. Because we combine technical stops with a percentage risk stop it does not matter if some of the stops are larger to give it more breathing room because it’s still the same percentage risk.

I also teach a threshold level where the trade is not to be taken because the stop would be too far away. The great thing is that when the stop is tight we get to load up on the number of shares with still only risking the same amount.

For example if I was to sell the SPY at $100.00 and the technical stop in this case was tight at only $101.00 I would only be risking $1 per share. If I had a $20,000 account and wanted to risk only 1% that would be a total risk of $200. So I divided 200 by $1 RPS (risk per share) = 200 shares. So if price drops to a target of $95.00 I would make $5 per share times 200 = $1,000. That is a 5% rate of return while risking only 1%.

On the other end if my technical stop had to be $110.00 I would be risking $10 per share (past the threshold of too high) and still be risking 1%. I would only be able to sell 20 shares ($200 divided by $10). So if I exited at the same target of $95.00 I would still make $5 per share, but only times it by 20 shares = $100, a 0.5% rate of return for the same risk of 1%. This is a bad risk reward ratio and why this trade would not be taken in the first place.

That is why if the RPS (risk per share) is too high we don’t take the trade. I share that threshold with my members (clue; it has to do with the risk vs. reward ratio). That is why many times on my free daily videos I say “we were able to load up on the shares in this trade because the RPS was so low!” Those are my favorite trades.

Yes we still get stopped out from time to time, but a lot fewer times than traders who are scared and place their stops way too tight.

The other end of the spectrum which many average investors are doing right now with their mutual funds is to trade with no stops at all. This is the dumbest investment strategy around. Only financial advisors who only care about their management fee recommend this strategy. I call it the buy, hold and pray method.

The sad thing is that many average investors have fallen for it. Yes the market might turn around, but you’ve got to admit, it also might not! If your mutual funds are down 20-30% how much more can you take? The financial advisors are hiding the fact from you that you can learn to trade for yourself and do it better than them with proper training.

There is an easy way to become a superior trader or investor “working” only 5-10 minutes per night. I am a former fund manager and used to trade 50 million plus at a time. After leaving the money management business and trading only for myself, I got disgusted with the pathetic trading strategies are being pushed on the internet.

Most of them have no idea how to place proper technical stops let alone how to combine it with a low risk percentage stop. Most of them have purely discretionary systems leaving you open to a gambit of contradictory trading decisions. To succeed long term you need to use technical stops combined with a max percentage loss stop.

Most of them DO NOT trade in the live market like I do every night setting up my EXACT trade entries and sharing them with my advanced members the day before the market opens. Lastly most of them require a whole lot more than 5-10 minutes per night.

Cheaper does not cost less. Even if you never buy my course, please don’t waste your time and money on some cheap $99 or $499 course. You always get what you pay for. If it sounds too good to be true, guess what, it’s not true.

Yes you will have losing trades in my system.

Yes we don’t make as much in flat or sideways markets.

Yes you can’t have dangerous 100 to 1 leverage trading ETFs.

Yes as your coach I will hammer you if you go outside the risk controls my system has in place.

Yes I have two weekly live webinars where I will hold your hand until you learn the system.

Yes we make a killing when the market is trending. Yes you can day trade my system if you want.

Yes my system works on any time frame.

Yes my system works on ANYTHING that produces a chart.

Yes you will be learning from a real trader instead of an infomercial marketing genius or an incompetent salesman financial advisor. Why am I so harsh? It’s because we are talking about your retirement and life.

This is not to be taken lightly with a pat on the back and an “it will be ok” attitude.

Yes I have a no questions asked 90 day money back guarantee according to the terms on my homepage.

Yes my system can be learned by people with no trading experience.

Yes you can trade using the Quote Tracker free charts and have no other out of pocket expenses.

Learn more about ETF Trend Trading or ETF Trend Trading Course

Jason Goode

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Can you seriously pass this opportunity up?

I will give you a great technical trading system that works in ALL markets, not just ETFs, but more importantly I will teach you how to stay disciplined to follow the signals, how to be fearful when others are greedy and how to be greedy when others are fearful, how to milk the trend for almost all it is worth, and how to have minimal trades and risk when the market is not trending.

For example: There will be lots of days where we won’t be in the market. That is ok, if it’s not a system trade it’s not a trade. The day you start trading outside of the system because you are bored or “need the action” is the day you start losing. Not trading is a trading decision.

On the other hand there is under trading, not taking the trade when the signal tells you to. If that is the case why even learn my system? If you are that scared do a demo account a few more months.

You can paper trade for as long as you want. In fact that is what I recommend to all my new students. Don’t risk a dime until you see that my system works. Once you see that, trading discipline becomes easy.

There is a big difference between working and playing. In work you sacrifice your time. Don’t come to trading with “work attitude”. Come with the right attitude. The big pay days are easy and it will feel like play.

At some point you will get a string of winners, do not become overconfident.

At some point you will get a string of losers, do not get depressed.

At some point you will get no new trades, do not get bored.

Overconfidence, boredom and depression are all killers of good traders. If you know upfront this will happen at some point in time you will be better prepared for when it does happen.

These tips are just the tip of the iceberg compared to what is in my course, weekly webinars and member’s area. I am a trading veteran. If you will learn from me I will rub off on you.

Some testimonials (also found on the ETF Trend Trading Home Page).

• “I think the fact that I will be able to make trades in the evening for the next day and go on with my every day life with my wife and kids and still make money instead of sitting in front of a computer is worth its weight in gold.”

Richard L. - Commercial Airline Pilot

• “The system works hands down. This is the best system out there because it has definite entry points, exit points and profit levels. It greatly helps remove the emotion from trading.”

Mark K. - Programmer

• “As an Financial advisor, I would say that this system is far superior to “buy-and-hold,” and “asset allocation,” because it takes all of the guesswork out of the process.”

Michael V. - Financial Advisor

• “You can finally learn to trade with rationality, confidence and safety and tell your over-priced stock broker that you can trade better than him and say good-bye to him.”

John C. - Family Doctor

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If you are looking for investment tools that will help you become a better investor then this article will point you to some of the more popular ones available online and the best part is that they are all free. You can google them or you can get all the links at darvas.

So here goes the list…

Magic Formula Investing : This strategy by Joel Greenblat shows how successful investing can be made easy for investors of any age with a “magic formula”, that makes buying good companies at bargain prices automatic. He has a free web site where you can search for these companies. Start with a few companies at the beginning. You take a look at your portfolio once every year and sell companies not in the list and replace them by the new ones. You can also read his book “The Little Book That Beats the Market” as your guide. You’ll know exactly where to go and what to do—and it won’t even take much time

Darvas Box: Use the strategy used by Nicolas Darvas who Turned $25,000 Into $2.25 Million Using A Simple Trend Following Technique. I have also put a link for a tool on my site which allows you to use the “Darvas Box” technique. Using this technique use you decide your “sell price” along with your “buy price”. No more guess work. A Darvas box is an area of price consolidation wherein the stock treads over a long period of time. The premise behind the Darvas box system is that when the stock breaks out above the top of the box, it triggered a buying opportunity.

A.I.M. - Automatic Investment Management : Robert Lichello provides a revolutionary investment method that overcomes the vagaries and risks of both the market and individual judgement. Automatic Investment Management (AIM) is designed to work in any kind of market with any size investment. You can use it in your 401K/IRA. You can use it with stocks or mutal funds. It is a plan that gives the investor a systematic and logical model for managing the ownership of long term investments. It is tax efficient in that most capital gains generated are long term in nature (over 12 months of ownership). It is generous in its realized profits (approx. 30% LIFO gains generated between a buy and a sell). It is a contrary model buying into market weakness and selling into its strength.

Rule#1 Investing : Phil Town’s strategy relies on Rule#1, which the famous investor Warren Buffett will tell you is, dont loose money. It essentially comes down to buying shares of companies only when the numbers—and the intangibles—are on your side. I will also give you a tool on my site to search for value stocks at bargain, based on Phil Towns Rule#1 Investing.

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Every trader/investor must guard himself against draw downs, which refer to the percentage drop in his account size after one losing trade or consecutive losing trades.

For example, imagine that after losing a few trades in a row, your $20,000 account is reduced to $12,000; that would be a drawdown of 8,000/20,000 = 40%.

If I were to ask some new traders, “In order to be back up to $20,000, what percentage return do you need to generate?”

Many would answer, “Since I lost 40%, I have to make back 40%!”

This couldn’t be more wrong! Note that after losing 40%, the trader now starts with a lower base, i.e. to undo the $8,000 loss, the return he needs to generate is 8,000/12,000 = 66.6%!

The more severe the drawdown, the harder it becomes to undo the damage, as shown in the numbers below.

Drawdown%……%Required to get back to break even
10%……………….11.1%
20%……………….25%
30%……………….42.8%
40%……………….66.6%
50%……………….100%
60%……………….150%
70%……………….233.3%
80%……………….400%
90%……………….900%

That is why all professional money managers only risk 1-2% per trade. It’s because no matter how good your trading system is at some point it is a statistical fact you will have 10 losers in a row.

Based on risking only 1-2% per trade this is only a 10-20% drawdown and easily recovered. 99% of the hype trading and investing courses in existence don’t say or do this. They say risk 5-10% per trade. It is wrong and will cause you serious financial pain if you follow their advice.

Many of them also use arbitrary stop loss advice. For example they say, “Place your stop at $100.10 because that is on the other side of a major support or resistance, trend line, MA, etc.”

This makes your risk based on the size of the stop. That is also wrong because the risk can be too large and it’s not the same risk on each trade.

Others reverse this and say risk only 2% total period and let that determine your stop. This is also wrong and will hurt you because it is important to have the correct technical stop.

The answer is to do both. Use a % and technical stop together. It works like this. Let’s say the technical stop is $100.10, but based on your entry price that is a 3% risk. Since your plan calls for a 2% risk you simply lower the number of shares you are trading.

This lets you stay within your 2% risk and have the correct technical stop. This is exactly what most professional money managers do. I know because I used to trade 50 million at a time and risk controls with correct technical stops is the number one priority.

Some say that this will lower their profits because of trading fewer shares. So what? Study the numbers above again. You know the old quote, “More risk equals more reward.” Well it’s not always true. Sometimes more risk equals more risk! If you lose your money you have no chance to make a profit. Even losing 50% is disastrous because you would then need to make 100% to get back to even.

Like Warren Buffet says, there are only two rules in investing.

Rule #1: Don’t lose money.

Rule #2: Don’t forget rule #1.

I’d like to add a third rule. Correct money management and position sizing must be mastered to insure your long term success.

The good news is that it is easy to have correct money management and position sizing. I just explained how to use a combo of a % stop and a technical stop.

Your system of entries, stops and profit taking is only half of your key to success. The other half is money management. If you get this part wrong you will lose your account every time regardless of how good your system is.

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Jason Goode

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Learn Commodity Trading. Commodity trading can be fun and profitable if done well. However, commodity trading is never easy. It’s not meant to be. It does not matter whether you are trading gold, soybeans or bonds; a successful speculator has to keep an eye on what is happening in many markets around the world.

We must learn to trade like mercenaries, trading not on the bull side or the bear side but on the right side. Commodity trading is certainly not for everyone. So what is the right vehicle for commodity trading? It depends on what commodity you want to invest in.

Commodity futures: Although many new futures products have been introduced but the physical commodities still are the major components of the futures market. Until 1970s, the futures markets and commodities were synonymous because the futures markets were all about those physical products that you could touch, taste, grow, mine, consume or deliver.Trade Dow Futures.

Commodities can be broken down into several categories like metals, energy, grains, livestock, food and fiber. Metals include copper, gold, palladium, platinum, and silver just like other segments of the futures markets. Learn Candlestick Charting.

The energy futures market has become one of the most important gauges of the world economic and political developments. Until 1978 when the New York Mercantile Exchange (NYMEX) launched trading in heating oil, Futures on Energy did not begin trading. Crude oil futures began trading in 1983. Natural gas futures contracts also get traded on NYMEX.

Now gold is a very important precious metal. Gold futures contracts trade on NYMEX! CBOT offers mini gold futures contract with lower margin requirements for retail investors. Similarly you can trade copper, silver, platinum futures contracts on different exchanges.

Chicago Mercantile Exchange (CME) offers milk futures contracts as well as the live cattle contract. Meat markets also have a number of futures contracts like the feeder cattle contract, lean hog futures contracts, pork bellies contracts like the other commodities markets.

Similarly you can find many futures contract that cater to the agricultural markets like soybeans futures contracts, corn futures contracts. You will also find coffee sugar, orange juice and coca futures contracts traded on various exchanges.

Equity markets also offer access to commodity trading in an indirect manner although the futures markets offer the most direct way to invest in commodity trading. You can invest in companies that specialize in the production, transformation and distribution of these commodities.

For example by investing in the diversified mining companies like BHP BILLITON or electric utilities or the integrated energy companies like EXXON MOBIL will still allow you to profit from the commodities boom.

You can also invest in the Master Limited Partnerships (MLPs) that invest in energy infrastructure like the oil pipelines and natural gas storage facilities. You can also invest in commodities mutual funds and exchange traded funds that deal with the commodities sector.

Commodity trading presents both challenges and opportunities. Commodities markets are both broad and deep. In the beginning chances are you will be overwhelmed by the number of tradable commodities to choose from. There are 32 tradable commodities to be exact.

How are you going to decide that you want to trade natural gas or frozen concentrated orange juice, gold or crude oil, soybeans or aluminum, silver or palladium? What about cattle, corn, feeder or copper? Learn candlestick charting.

If the oil prices go up, the central banks are forced to raise the interest rates to fight inflation. Much of what happens in the world-from your home mortgage loan to your job depends on the global oil prices and the interest rates. Do you remember the sudden spike in oil prices from around $60 to $145 during the summer of 2008?Know swing trading.

This can happen again. Just because the global economy has gone into a recession, the demand for oil has decreased. But once the global economy starts to expand again, oil demand will again go up.

How do you know what is the best way to invest in commodities? So how do you decide which commodity to trade? Should you trade commodities futures, or get stocks of companies dealing with commodities like Exxon Mobil or Starbucks or invest in ETFs or commodities mutual funds. Just getting started in commodity trading can be daunting.

You should know that futures trading is only one way of getting involved in commodity trading. However, as there are many commodity futures contracts that are traded on various exchanges, a lot of investors think that commodity trading is synonymous with futures trading. There are many other ways of commodity trading. Trade Dow Futures.

Between 2001 and 2006, oil, gold, copper and silver all hit an all time high. Many other commodities reached an oil time high. The prices are down now somewhat due to the global recession. Many analysts are of the opinion with the end of global recession the prices of most of the commodities will skyrocket. Do you know that the 21st century is the century of commodity trading?

A long term cyclical bull market in commodities is expected during the first part of the 21st century due to some fundamental factors like the global population explosion, urbanization and the industrialization of the emerging market economies like Brazil, India and China (BRIC).

However, it doesn’t mean that there will be no minor downturns like that in the present due to the recession. Commodities are poised for a rally that will last long in the 21st century. Gold prices are still going higher and higher.

Wealthy investors are taking refuge in gold due to the financial crisis and weakness of US Dollar. Do you want to ride the trend in the gold market? Countries like China, India, Russia etc are buying gold in the open markets that is driving the gold prices higher and higher. You maybe already late!

The summer doldrums are definitely here as the stock prices crept upwards on Monday. The Dow Jones Industrial average had the largest percentage gain of the three major averages rising 90.99 or 1.08% points to close around 8529.38. The Nasdaq added 5.84 or 0.32% and ended the day at 1844.06 and the S and P 500 Index finished up 8.33 or 0.91% settling at 927.23. The news of the day was unrelated to trading and involved Bernie Madoff getting a sentence of 150 years in prison, meaning the 71 year old crook will likely die behind bars.

The earnings season is also creeping up on us and the largest tax preparer H and R Block reported today. The companies earnings were better than most stock traders were expecting saying in their press release that income from continuing operations grew to $513 million or 15%. Their earnings per share grew to $1.53 up from $1.36 in the same quarter last year. Their consolidated net income increased to $1.45 per share or $486 million after reporting a loss for the same period last year. They said earnings for the full year 2010 from continuing operations were expected to be $1.60 to $1.80 per share. They closed at 15.67 per share up around .25 or 1.62% around its highs for the day, it is still down nearly 33% year to date.

The other report stock traders were focused on was Apollo Group, Inc. which reported its third quarter fiscal 2009 results. Apollo Group is a company primary focused on higher education for working adults and runs colleges such as the University Of Phoenix and Western International University. Some of the bullet points of their press release were posting their first quarterly revenue of over $1 billion a 26% increase over the same period last year. Apollo reported $201 million in net income on revenue of $1.05 billion for the three months ending May 31, 2009. The company had a third quarter profit of $1.26 per share significantly higher than the .85 cents per share they reported in the year ago period. Also well above analyst consensus estimates of 1.12 per share. The stock opened the day slightly higher but then dropped more 3.6% ahead of the news to close at 65.99 per share. After the bell Apollo Group jumped 5.3% and was trading around 69.53. Look for that good size pop to follow through on Tuesday.

Stock markets on Monday saw a drop in trading volume since the couple large moves last week and should continue the lazy summer trading tomorrow. Tuesdays most popular earnings release will be Sealy Corporation which analysts expected to make 0.04 cents per share. For Tuesday June 30 stock market investors will also be watching the release of the Chicago PMI (Purchasing Managers Index). The Chicago PMI is a survey released by the Institute of Supply Management surveying manufacturing and non-manufacturing business conditions in the Chicago area. Numbers above 50 percent indicate an expanding business sector. Stock investors are looking for healthy economic growth the thinking being that means corporate profits will be higher. While bond traders look for moderate growth that won’t create inflation. May’s number was weaker than expected at 34.9 and the consensus for June is estimated to be 40.

The other economic release traders will be watching is the consumer confidence number. The Conference Board surveys five thousand consumers across the country and asks them about their attitudes and expectations of the economy. Consumer spending is two thirds of the economy so their confidence directly and significantly affects economic growth. Stock market investors want a high number which would mean higher corporate profits, while bond traders are always worried about excessive inflation should the consumer be overconfident. The number for May was 54.9 a major jump off the April level of 40.8 and the consensus estimate for June is 57.

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