Social Security will pay benefits to those who have paid into the system, their beneficiaries in many cases, and also to some disabled individuals who have not paid into the system. In general, Social Security Benefits will only be paid in cases where individuals paid into the system. The exception is Supplemental Security Income (SSI), which is actually paid from the general tax revenue of the government, and not the actual Social Security trust funds, though it is administered by the Social Security Administration. Continue reading...
Social Security benefits are streams of income available for retired workers, their spouses, children and dependents, and survivors. It provides insurance against longevity, disability, and, to some extent, the death of the primary contributor. Social Security benefits are available to a worker and their dependents if the worker has triggered eligibility, which usually calculated as earning over $5,040 for 10 years, but is modified if the worker dies or is disabled at a young age. Benefits can be paid to multiple people within a household (and an ex-spouse) based on one worker’s contributions to the system, up to a Maximum Family Limit, which is somewhere between 150-180% of a worker’s full benefit amount. Continue reading...
Social Security uses mandatory payroll taxes to grow trust funds that are used to pay income to retirees and other qualifying persons. Any surplus that is collected in a given year and not paid out is used to purchase Treasury Bonds, which pay a guaranteed rate of interest to the trusts and allows the government to use this surplus money in the meantime. When you receive your paycheck, you’ll see a deduction for FICA (Federal Insurance Contributions Act), which is a “combined payroll tax” for both Social Security and Medicare. Continue reading...
Relative Strength Index (RSI) is a momentum oscillator developed by Welles Wilder. In the RSI, the average gains and average losses over a specific time period (such as 14 days) are divided to calculate the Relative Strength, then normalized into the Relative Strength Index (RSI), which is range bound between 0 and 100. The RSI typically fluctuates between values of 70 and 30, with higher numbers indicating more momentum. According to this indicator, a security with an RSI over 70 (out of 100) can be considered overbought, while a security with an RSI under 30 (out of 100) can be considered oversold. Continue reading...
The Relative Strength Index (RSI) was developed by J. Welles Wilder Jr. to measure asset momentum using price changes and the speed of those changes. Like stochastics, the RSI is an oscillator that reads between 0 and 100; in this case, the RSI calculation determines the ratio of upward and downward movement using 14 periods of data, then smooths it out so only strong trends approach 0 or 100. Traders traditionally interpret RSI values of 70 or greater as an indicator of an overbought asset, while values 30 or below indicate an asset has been oversold; higher or lower values (like 80 and 20) can be used to minimize the number of bought or sold readings. Continue reading...
Overbought is a term used when analysis indicates demand seems to have been escalated by investor emotion or media hype, beyond the point where it can be sustained or supported by fundamentals. The increased demand drives the price of the security up for a short time, before the overbought security likely experiences an eventual sell-off and price decline. It is hard to determine when a security is overbought, but the Relative Strength Index (RSI), an momentum oscillator developed by Welles Wilder, is one tool that can help make a determination. In the RSI, the average gains and average losses over a specific time period (such as 14 days) are divided to calculate the Relative Strength, then normalized into the Relative Strength Index (RSI), which is range bound between 0 and 100. The RSI typically fluctuates between values of 70 and 30, with higher numbers indicating more momentum. According to this indicator, a security with an RSI over 70 (out of 100) can be considered overbought. Continue reading...
Oversold describes a situation in which a security has an inherent value greater than its price, which has decreased due to low demand. It is hard to determine when a security is oversold, but the Relative Strength Index (RSI), an momentum oscillator developed by Welles Wilder, is one tool that can help make a determination. In the RSI, the average gains and average losses over a specific time period (such as 14 days) are divided to calculate the Relative Strength, then normalized into the Relative Strength Index (RSI), which is range bound between 0 and 100. The RSI typically fluctuates between values of 70 and 30, with higher numbers indicating more momentum. According to this indicator, a security with an RSI under 30 (out of 100) can be considered oversold Continue reading...
Momentum trading usually involves long positions in a security that has been experiencing an uptrend and has a high volume of trading, and dropping positions that have lost momentum. Several systems exist to help take the emotion out of trading and to stick to a theory with rules. Momentum trading is such a system, and it can be automated with help from algorithm. Some indicators that can be used are Rate of Change and Relative Strength Index. Some would identify high momentum as steady price increases bolstered by high trading volume. Continue reading...
Market momentum is the tendency of a trend to continue in one direction or another. Various analysis methods and indicators seek to identify the strength of trends and to find points of possible reversals and retracements. A market has strong momentum when trading volume is up and confirms the direction of price movement in the market. Bullish or bearish market sentiment will influence the degree of momentum that is present. Continue reading...
The analysis of convergence and divergence between indexes and other data seeks to find leading indicators where there is confirmation or non-confirmation of trends. Dow Theory was one of the first examples of such thinking. Charles Dow would watch the movements of Industrials and the Rail and compare the uptrend or downtrend of each. Where trends do not line up (e.g., one is trending downward with lower troughs and the other has “higher lows”) there is “divergence”, and non-confirmation of what was thought to be a trend in one index. Continue reading...
The Golden Cross is a breakout candlestick pattern formed when the short term 50-day moving average for a security exceeds its long term 200-day average, backed by high trading volumes. Investors typically interpret this crossover as a harbinger of a bull market, and its impact can reverberate throughout index sectors. The longer time horizons tend to increase the predictive power of the Golden Cross. As seen in the chart in this example, a trader may view the moment when a 50-day moving average (blue line) crosses above a 100-day or 200-day moving average (red line) as a bullish sign for the stock or security. A trader may consider taking a long position in the security, or perhaps explore call options to take advantage of the potential upside. Continue reading...
In statistics, the number of times that a specific value shows up in a data set is the absolute frequency of that value. The absolute frequency can then be used to find the relative frequency, which is the probability that the specific value is observed in a given number of trials. The relative frequency (empirical probability) takes the absolute frequency and divides it by the total number of trials (cumulative frequency), and can be expressed as a ratio or percentage. Continue reading...
The “Shanghai” is an index measuring all shares that are traded on the Shanghai Stock Exchange (China). The Shanghai Index - also referred to as the SSE Composite Index or simply “the Shanghai” - is an index measuring price changes of all A and B shares traded on China’s Shanghai Exchange. Many foreign investors have only limited access to trading shares on China’s main exchange, which makes price discrepancies likely. Continue reading...
The Relative Strength Index (RSI) is more than just a momentum oscillator; it's a versatile tool that, when used judiciously, can provide traders with valuable insights into market conditions. Continue reading...
Explore the Hang Seng Index (HSI), Hong Kong's premier equity market benchmark. From its history to structure, understand the HSI's role as a reflection of economic vibrancy and investment trends in one of Asia's financial hubs. A vital guide for investors & market enthusiasts. Continue reading...
The Accumulative Swing Index (ASI) is a trendline representing the running total of an oscillator called the Swing Index, first described by Webb Wilder in his book, “New Concepts in Technical Trading Systems.” The Swing Index itself compares the price data from the current period and the preceding period to quantify the positive or negative “swing,” which can be understood as a measure of directional velocity in a price. Continue reading...
When it comes to navigating the complex world of trading and investing, tools that can help you make informed decisions are invaluable. The Relative Strength Index (RSI) is one such tool that provides traders and investors with a means to gauge the overbought and oversold conditions of an asset, allowing them to identify potential buy and sell signals. The RSI is a momentum indicator that measures the speed and change of recent price movements. It's scaled between 0 and 100, with the aim of providing insights into the strength and direction of an asset's price movement. Continue reading...
Since September is historically a lackluster month in the stock market, it can make sense to follow this modern proverb. There is an old saying on Wall Street, which stipulates that you should sell your positions on Rosh Hashanah (the Jewish New Year, which comes usually in September or October), and establish a new position on Yom Kippur (Jewish Day of Atonement), which usually comes a week later. Continue reading...
A cost-of-living adjustment (COLA) is a crucial component of Social Security and Supplemental Security Income (SSI) programs aimed at safeguarding recipients against the corrosive impact of inflation. Rising prices in the economy can erode the purchasing power of fixed-income beneficiaries, making it essential to periodically adjust their benefits to keep pace with the increasing cost of living. COLAs are calculated based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for a specific period. Continue reading...
The Social Security Act, signed into law by President Franklin D. Roosevelt in 1935, is a cornerstone of the U.S. social safety net. This landmark legislation created a system of benefits for retired individuals, the jobless, and those with disabilities, while also providing aid to dependent mothers and children, victims of work-related accidents, and people with visual or physical impairments. Prior to this groundbreaking act, the federal government's involvement in such social welfare programs was minimal, primarily limited to pensions for veterans. Continue reading...