Looking for Tax Bombs and Bouquets in Your Mutual Fund

There won’t be many years like 2009. Fund investors earned returns in the range of 20% to 70% on equity and high-yield bond funds. Even better, most didn’t have to pay capital gains taxes, either. Funds had big losses on the books from 2008 to offset realized gains in 2009, so they were able to avoid making distributions.

But if you’re buying funds today, you ignore taxes at your own peril. A good chunk of those past losses have been worked off, and income tax rates are set to rise in 2011. You might get by for a year or two without being hit by capital gains, but stock funds are meant to be held for 10 to 20 years. If you’re shortsighted about taxes, you could pay a price down the line. Each year, funds have to distribute any realized gains after subtracting past and current realized losses. [Read the full article]

While it seemed risky at the time, the pattern of new highs with strong volume pointed toward higher prices. I don’t see any better indicator of institutional buying than volume

You can see from the 60-minute chart below the breakout of a tighter formation. In trading options, my calls have to be right in direction and timing, or I will lose or just spin my wheels. I need to see acceleration and velocity, which rarely ends after one session. Continuation moves are the norm rather than the exception, but those without patience will pass on such a trade. An example of trading the Feb. 10 options is below, from an entry date of Jan. 11 to a closing day of Jan. 20.

Quotes and other information supplied by independent providers identified on the Yahoo! Finance partner page. Quotes are updated automatically, but will be turned off after 25 minutes of inactivity. Quote data delayed 15 minutes for Nasdaq, NYSE and Amex. [Read the full article]

Below are lists of the top 10 open-market insider purchases and sales filed at the Securities and Exchange Commission Thursday as ranked by dollar value. Company executives and directors are in the best position to assess the attractiveness of their firms’ shares, and here is how many of them are voting their wallets! Please note, however, that these are factual lists, not buy and sell recommendations. Dollar value is only one metric to assess the importance of an insider transaction. [Read the full article]

From 1990 to 1997, Kevin Haggerty served as Senior Vice President for Equity Trading at Fidelity Capital Markets, Boston, a division of Fidelity Investments. He was responsible for all U.S. institutional Listed, OTC and Option trading in addition to all major Exchange Floor Executions. For a free trial to Kevin’s Daily Trading Report, at tradingmarkets.com.

The socialists lost a key election in Massachusetts on Tuesday and the next day they changed their colors and “saw the light” and if you believe that I have a bridge in NY you can buy on the cheap. However, yesterday Obama countered with his bank attack regulation proposal and the market immediately sold off. The SPX made an intraday low at 1114.84 and closed at 1116.48 with the 50DEMA at 113.61 Both the INDU and NYA traded and closed below their 50DEMA’s.

The devil is in the details, and the market doesn’t know the specifics yet. [Read the full article]

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