Psychological resistance is a person's refusal to change their behavior directly or indirectly to a certain set of events triggered by a past circumstance in the market place that they refuse to discuss, remember, deal with or even think about. We call this resistance "pissed off supply". They sell simply because this is exactly where they bought weeks, months or years prior. For no other reason than that.

Technical resistance on the other hand is completely different because it's "rational behavior" done by far fewer market participants and in this update, I will explain why the 1,100 "psychological barrier" that I keep talking about will soon end as we get buyers around the 1070 level. In fact, that is the range of the market all week. Not a coincidence!

Video Update That Explains It All

The Right Way to Invest in IPOs

Trading IPOs is an exciting way to make spectacular gains. It's also a great way to lose money.

Buying an IPO at the offering price, and then selling the stock soon after it starts trading on the open market, is known as "flipping," and it is one of the riskiest ways to invest in IPOs. In fact, it is greatly discouraged by underwriters, especially if done by individual investors.

So I'm going to show you how you should be trading IPOs to maximize your profits and minimize your risk. And with the IPO comeback we're witnessing, now is the perfect time for you to hone this trading strategy.

What to Look for When Investing in IPOs

Before we get to my trading strategy, though, I want to cover a few basics.

IPO stands for initial public offering, and refers to a company issuing its shares to the public for the first time.

Investing in IPOs requires that you do some homework, such as identifying early on which patents, trademarks and key executives can help take a company to new heights.

Think of it this way: If you were transported into the future by pressing "CTRL, ALT, F" on your keyboard, would the products a particular company is selling still be around? The answer to this and similar questions will help you to distinguish between the fly-by-night companies and the ones that are not going away any time soon.

Also, when selecting IPOs to invest in, make sure you take sector performance and industry growth into account.

You Don't Have to be First to the Party ... and You Don't Want to be Last

Some of these newbie stocks skyrocket in the hours, days and weeks after they go public.

September's hot issue, Lihua International Inc. (LIWA), which went public on Sept. 4, doubled by the end of that month.

While these kind of quick gains are enticing, and, yes, a lucky few do make spectacular profits, this is a risky game for individual investors. Even if you do get in on a nice run immediately after a company goes public, how do you know when to bail out?

IPOs trade erratically, and because it has no trading history, there's no way to predict what the stock will do next.

LIWA hit its high of $10.69 in early October, and since then shares have given back about half their value. So, if you're not careful, you could end up being the one holding the bag when the party is over.

That's why I prefer to trade the secondary reaction versus the initial "out-of-the-gate" reaction. And that is where technical analysis comes in.

Waiting for the secondary move allows you the benefit of using the charts to guide you through the overall supply and demand picture. By trading the secondary reaction, you avoid whipsaw from buying high out of the gate, and then selling low out of fear.

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I want to let you in on the next investing phenomenon: IPOs.

Sure, IPOs are nothing new, but I can tell you that we are looking at the hottest IPO market we have seen in years, and you'll be kicking yourself if you miss out on the chance for phenomenal profits in this arena.

One thing we have learned about bear markets, especially after the brutal one following the dot-com bubble crash of 2000, and the latest bear market brought on primarily by the subprime mortgage crisis, is that they have a silver lining in common. That is, when the dust settles, the companies that are able to go public are typically the cream of the crop.

After the virtual IPO drought associated with bear markets, it is the "best-of-breed" companies -- the ones with clean balance sheets, compelling growth stories, etc. -- that are able to come to market first. And this is exactly what we are witnessing right now, with a flood of quality mid-cap companies going public.

Soon we may see the smaller-cap companies go public, and that will tell us much more about the health and longevity of the current IPO market trend. You see, the smaller the company, the more nurturing it needs, because of the higher beta, which, in turn, means higher risk.

Wall Street, in my opinion, still has some challenges to overcome before it's full steam ahead with the higher-beta, more speculative companies. But the steady stream of mid-cap names going public is a good sign.

Make no mistake about it; now is the time you want to be investing in the best IPOs that come to market.

Just take a look at the chart below. The IPO Composite Index, a float-weighted index of IPO performance, has returned about 42% so far this year, compared with 18% for the S&P 500.

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My Top 3 Biotech Stocks Report Next Week (I Actually Now Have A 4th Subscribers Already Positioned In That Play) And We Have No Position In AMGN!

But let's see how these suggested plays from 09/03/09 play out this week! Keep in mind all our options are 2010 expiration option plays. So just in case we have a market wiggle we gave ourself enough time to bounce back.

How to Double Your Money on 3 Top Biotech Stocks

Not too many sectors can claim that they made new all-time highs after the worst bear market that most of us can remember just a few short months after the broader market bottomed.

So, while many market pundits continue to call for a stock market correction as we enter what is historically the worst month of the year for the stock market, I offer three trades in the biotech sector.

The higher stocks in general go, the louder the predictions for disaster will be. But before we circle the months of September and October on our End of Days calendar, let's take a look at Celgene Corp. (CELG), Gilead Sciences (GILD) and Amgen (AMGN) as biotech plays that should continue the move the Amex Biotechnology Index (BTK).

First, let's review the BTK. As you can see from the chart below, it has broken out from an ascending triangle to new all-time highs.

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It's flu season, and the publicity surrounding the H1N1 (swine) flu has people more nervous than usual this time of year. And managers are worried about the impact this could have on employees and their businesses.

Sick workers can disrupt business operations and result in lost work days and, thus, lower productivity. This is especially troubling given the tough economic times and the already reduced workforce at most companies due to layoffs.

Enter LogMeIn Inc. (LOGM). This company provides on-demand, remote-connectivity solutions to businesses and consumers -- in fact, it connects more than 70 million devices worldwide.

Users rely on LogMeIn solutions for remote connectivity and support solutions. And the company also offers on-demand remote access software to your desktop from your iPhone. Pretty cool stuff!

I'm not the only one interested in this recent IPO. LOGM is getting a nice round of applause from the folks following the venture capital world, and the stock recently received five upgrades:

"Overweight" by JPMorgan
"Overweight" by Barclays Capital
"Overweight" by Thomas Weisel
"Overweight" by Piper Jaffray
"Buy" by Canaccord Adams

LOGM's IPO Story
LogMeIn Inc. went public on June 30, at $16 a share, and the stock immediately shot up to nearly $21. That's a pretty nice move, but when it comes to trading IPOs, the approach I like best is trading the secondary reaction versus the initial "out-of-the-gate" reaction. By trading the secondary reaction, you prevent whipsaw from buying high out of the gate, and then selling low out of fear.

Also, it is typically the secondary move that is the meatiest part of the move, and you also have the benefit of using the charts to guide you through the overall supply and demand picture. Monitoring the supply and demand via the charts will assure that you don't end up holding the bag when the party is over, because, as we all know, one day the punch bowl will run dry.

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Shipping Stocks Ready to Break Out

As I mentioned last time, the Baltic Dry Index (BDI) tracks worldwide international shipping prices of various dry bulk cargoes, and is a gauge of global supply and demand for these commodities. The steady rise in the BDI we've witnessed lately is seen by many as a key indicator of an increasing world commodity trade.

More importantly to us, though, the BDI is considered to be a sort of industry thermometer, and a leading indicator as to the behavior of stocks in this sector.

After experiencing a decline, the BDI is now going approaching the highs of two months ago, and I believe we are about to witness a parabolic rally

The BDI has seen some milestone developments in the past two weeks. It is up almost 25% since the time I wrote the last article, and it has risen the past 11 trading days in a row. And the index is attempting to break out of a bullish continuation falling wedge pattern.

Like I said, the BDI is a great leading indicator for shipping stocks. With the index poised to break out, we could also see explosive moves in individual stocks.

The stocks in this sector now have the momentum to make the wild 10% intraday moves up like they did earlier in the year when the BDI showed the same chart pattern that it is displaying now.

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Tracking The Count On AAPL

Because of the new blogging law I need to clearly state that I was not promised, given, or paid to post this gummy bear video with gummy bears or gummy worms. Although I don't know for sure if gummy bears or worms would be considered payment if they are red or blue in color but I defiantly think if I was given any green ones that I should disclose it. Good news I was not given nothin.

A Once-in-a-Lifetime Opportunity to Profit in Gold

We are in the midst of a global liquidity drenching and everything, and I mean everything, is going to get wet. But the leader of the pack will be the precious metals sector, specifically gold.

The gold sector is the most emotional I have seen it in years, with the bulls and bears at each others throats. So I can understand why some traders may be confused.

I think the bears are dead wrong and most of the bulls are completely missing the point as to why gold is rallying in the first place. This is precisely why trading gold will stay a pros game -- so let me guide you to profits in this sector.

I became extremely bullish on gold in August, and if you've been following my updates on OptionsZone -- Don't Miss the Bull Run in Gold and 3 Golden Option Opportunities -- I hope you enjoyed cashing in on the 100%-plus winners I recommended.

To be clear, I am not one of those gold bugs. I am what you would call a "greed bug" -- I am just here for the ride and ready to move on to the next hottest sector in a year or so.

Gold Rising in Every Currency Sparks 'Global Phenomenon'

Gold gone up every single year for nine years straight and counting. None of the major indices or any other market segment I know of can make that claim, and that includes oil and every other commodity in the energy sector.

When you hear the media propaganda that the only reason gold is going up is because the U.S. dollar is dropping, then ask yourself why is it going up in every currency? After all, every currency in the world isn't in freefall, and gold is breaking out in nearly every major currency in a parabolic fashion.

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The Whipsaw Song