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Have you ever held on too long to a winning position? You watch as that former top performer in your portfolio slows down, and then rotates lower, and then really begins to deteriorate, and you just watch it all happen without taking action?

If the answer is “yes”, then you have fallen victim to one of the more frustrating of the behavioral biases called “endowment bias”. Basically, we feel unable to let go of this position because of our emotional attachment, and we hold on to a losing position despite very clear technical signs that we should do otherwise!

Today I’ll share three technical analysis techniques that I’ve found helpful to cut my losses, minimize the crippling impact of endowment bias, and preserve my portfolio through challenging periods.

When in Doubt, Follow the Trend

The biggest issue I find when it comes to endowment bias is that investors simply ignore clear signs on the chart. As my mentor Ralph Acampora once told me, “Analyzing the chart is the easy part. Actually doing what the chart tells you? That’s the tough part!”

The chart of Intel Corp. (INTC) in early 2024 shows how a stock can rotate from a period of accumulation to a period of distribution. In late 2023, INTC was making higher highs and higher lows, the price above two upward-sloping moving averages. The RSI was mostly above the 40 level, representing a bullish range for this momentum indicator. The relative strength (bottom panel) was steadily trending higher, demonstrating that INTC was outperforming the S&P 500.

By April of 2024, literally all of the previous bullet points had changed from bullish to bearish. INTC was now breaking down through moving average support, the moving averages were beginning to slope lower, and the RSI had moved to a bearish range below 60.

Think of technical indicators like a checklist, and go through the process of evaluating each indicator on the chart to determine whether the current reading is bullish or bearish. And when you get to a point when the bearish evidence outweighs in the bullish, then move on to better opportunities!

Relative Strength Can Bring Additional Clarity

Sometimes a stock will stop going higher, but instead of breaking down it enters a new consolidation phase. Microsoft Corp. (MSFT) showed this particular phenomenon in 2024, as it entered a trading range between $400 and $460 after a new all-time high in July.

Now even though the price trend was now sideways, note how the relative strength line began to trend steadily lower. This pattern emerged because MSFT was holding support, so the price trend was still in decent shape, but other stocks were continuing to pound out a strong second half to 2024.

When you’re holding a stock with deteriorating relative strength, your “opportunity cost alarm” should be going off big time. Basically, while you’re not necessarily losing money holding this particular stock, there are other stocks out there that are still moving higher. So by tying up your capital in this particular stock, you’re missing out on other opportunities to outperform!

Institutional investors tend to be laser-focused on relative strength, as that is pretty much exactly how they are evaluated as active managers. So think like an institutional investor, and if your charts begin to feature weakening relative strength, look around for other places to outperform.

Divergences are Often an Early Warning Signal

Parts of the technical toolkit can be used more as leading indicators than lagging indicators. I’ve found bearish momentum divergences to provide excellent early warning signals, because they will raise a red flag while the primary uptrend is still in place.

The chart of Synchrony Financial (SYF) still appears in decent shape, with a pattern of higher highs and higher lows continuing through early 2025. But notice how the RSI has actually been making lower peaks since early November, despite the stronger price action?

SYF and similar names will usually find a place on my “potential topping patterns” ChartList, helping me focus on charts that are still going higher yet demonstrating similar characteristics to previous market tops. I’m happy to still own a chart like SYF as long as the price keeps showing strength, but the bearish divergence tells me to be ready to take profits if the impending drop becomes a reality.

Mindless investors ignore clear signs of price deterioration because endowment bias prevents them from admitting a change in the technical evidence. Mindful investors, however, have a consistent process for evaluating their holdings, and are more easily able to admit when a chart is no longer helping them achieve their portfolio goals.

RR#6,

Dave

P.S. Ready to upgrade your investment process? Check out my free behavioral investing course!


David Keller, CMT

President and Chief Strategist

Sierra Alpha Research LLC


Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.

Israeli police raided two Palestinian bookstores in occupied east Jerusalem on Sunday, confiscating books and arresting one of the owners and his nephew, according to their family members.

CCTV footage shared by the owners, four brothers from the Muna family, shows police officers putting books in trash bags at one of the branches of the Educational Bookshop, a decades-old respected institution with Arabic- and English-language branches.

Photos shared by Muna of the Arabic-language store show books, notebooks and writing materials scattered on the ground.

Israeli police said in a statement Monday that two people were arrested on suspicion of “selling books containing incitement and support for terrorism.”

“The suspects who allegedly sold the books were taken into custody by police detectives,” the police spokesperson’s unit said.

Israeli police said that “detectives encountered numerous books containing inciteful material with nationalist Palestinian themes” in the stores.

Among them was a children’s coloring book titled “From the River to the Sea.” The expression is politically controversial in Israel. Some Palestinians use the phrase in support of a homeland between the Jordan River and the Mediterranean, but many Jews regard it as a call for Israel’s destruction.

The Educational Bookshop was established in 1984 on the central Salah el Dein street in East Jerusalem. The original branch sells Arabic books, while the English-language store opened years later is frequented by Palestinians, Israelis and foreigners alike.

The group “The Time Has Come”, which lobbies for peace between Jews and Palestinians, said the bookstore and its people “are an important part of the shared future we envision for Jerusalem. The arrest and confiscation not only harm the right to free expression and the freedom of information but also place the city’s future on the brink.”

Francesca Albanese, the UN Special Rapporteur for Palestinian Territories, said she was “shocked by the raid” on the bookstores, which she called “an intellectual lighthouse and family-run gem resisting Palestinian erasure under apartheid.”

Albanese also urged the international community in Jerusalem to “show up, stand with the Muna family, and protect this vital hub.”

Correction: This article previously referred to “The Time Has Come” group as “Ad Kan.” The two groups are separate entities, and the comments in this article are those of “The Time Has Come.”

This post appeared first on cnn.com

Romania’s outgoing centrist president, Klaus Iohannis, resigned on Monday as opposition hard-right parliamentary parties planned to have him impeached.

The European Union and NATO member state, which borders Ukraine, was plunged into institutional chaos last year when little-known far-right NATO critic Calin Georgescu won the first round of a presidential election.

After accusations of Russian interference – denied by Moscow – Romania’s top court voided the entire election.

With the two rounds of the election set to be re-run on May 4 and May 18, Romania’s top court had said Iohannis, whose second and last term expired on December 21, would stay on until his successor was elected.

But in January, three far-right opposition parties, which control around 35% of parliament seats, filed a motion to impeach Iohannis.

With the motion up for a vote, and Iohannis deeply unpopular, analysts have said some lawmakers from mainstream pro-European parties could give the hard-right’s impeachment effort the required majority.

“The request will have consequences both domestically and abroad,” Iohannis told reporters. “To spare Romania this pointless and negative crisis… I am resigning from the president’s office.”

Senate speaker Ilie Bolojan, head of the Liberal Party, a member of the ruling coalition, will take over as interim president with limited powers until the election.

The three hard-right groupings, whose support has risen since Georgescu’s surprise win, had used their campaign against Iohannis as a reason to stage protests and seize the political agenda.

This post appeared first on cnn.com

Scores of unexploded bombs dating from World War II have been recovered from a children’s playground in northern England after a chance discovery.

Two bombs were initially removed by the British Army, the UK Ministry of Defense said in a statement. The parish council was then advised that a full survey of the area was required, according to a council spokesperson.

Bomb disposal company Brimstone Site Investigation then uncovered 65 10-pound practice bombs and smoke cartridges on the first day of works, with a further 90 practice bombs recovered on the second day.

According to the parish council, all of the bombs need to be found and removed before the park can be reopened. It said 174 devices had been found so far.

“Whilst this ordnance is described as practice bombs, they do still carry a charge and given the numbers involved, need to be recovered by professionals to satisfy all concerned that the playpark area is once again safe for contractors and ultimately users of the equipment,” the council said in its statement.

Local politician Mark Mather told the BBC that the area was reportedly used to train the Home Guard volunteer army during World War II, and it appeared that after the war the ordnance was buried.

Further excavations will be carried out to make sure the playground is completely free from unexploded ordnance before new equipment is installed, the parish council added.

In February 2024, thousands of residents were evacuated in Plymouth, southwest England, as authorities worked to remove an unexploded 500-kilogram (1,102-pound) bomb discovered in a garden in the city.

This is not the only time that unexploded ordnance has been discovered in England recently.

The bomb was moved before being disposed of at sea, after it was decided that detonating it in situ would have risked significant damage to nearby properties.

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Hamas has said the next hostage release scheduled to take place in Gaza on Saturday will be postponed, accusing Israel of breaking the ceasefire deal.

In a post on X, Abu Obeida, spokesman for the Qassam Brigades, Hamas’ armed wing, said that the handover of the prisoners “who were scheduled to be released next Saturday … will be postponed until further notice, and until the occupation commits to and compensates for the entitlements of the past weeks retroactively.”

He added: “We affirm our commitment to the terms of the agreement as long as the occupation commits to them.”

In response to Hamas’ announcement, Israeli Defense Minister Israel Katz said he has instructed the country’s military to “prepare at the highest level of alert for any possible scenario in Gaza.”

The defense minister described Hamas’ move as a “complete violation of the ceasefire agreement and the deal to release the hostages.”

Israel’s far-right former minister of national security, Itamar Ben Gvir, said Israel should respond with a “massive attack on Gaza.”

“Hamas’ announcement must have one real-life response: a massive attack on Gaza, from the air and land, alongside a complete halt to humanitarian aid to the Strip, including electricity, fuel and water, and including the bombing of aid packages that have already been brought in and are in Hamas’ hands in Gaza,” Ben Gvir, leader of the Jewish Power party, said in a Monday statement.

Hamas and Israel have each accused the other of violating the agreement throughout the first phase of the deal, raising questions about whether the ceasefire that took more than 15 months to reach would hold.

Hamas released three hostages on Saturday in the latest exchange since a ceasefire went into effect on January 19.

In exchange, Israel released 183 Palestinian prisoners, of whom 18 were serving life sentences. The majority had been detained in Gaza since October 7 and had no public charges against them.

Hamas has now released a total of 16 Israeli hostages as part of the first phase of the ceasefire agreement, of a total of 33 promised at staggered intervals during this stage. Eight of those 33 are dead, according to the Israeli government.

Following the release of the three hostages on Saturday, Hamas and its allies still hold a total of 73 people taken from Israel on October 7, 2023, of 251 initially taken. Three additional hostages, held captive since 2014, are still in Gaza.

Under an agreement signed in Qatar last month, negotiations to begin a second phase were supposed to begin on Monday.

Earlier Monday, the Hamas-run Gaza Government Media Office said Israel had refused to allow the entry of shelter supplies specified in the ceasefire agreement

This is a developing story and will be updated.

This post appeared first on cnn.com

A bus veered off a highway bridge into a polluted ravine in Guatemala City early on Monday, killing at least 51 people and trapping survivors, a spokesperson for the city’s fire department said.

The densely packed bus was traveling into the capital from the town of San Agustin Acasaguastlan on a busy route into the city from when it plunged approximately 20 meters (65 feet) from Puente Belice, a highway bridge that crosses over a road and creek.

The spokesman, Carlos Hernandez, said the bodies of 36 men and 15 women had been sent to a provincial morgue set up for the accident.

Images shared by the fire department on social media showed the bus partially submerged in wastewater surrounded by victims’ bodies.

Guatemalan President Bernardo Arevalo declared three days of national mourning and deployed the country’s army and disaster agency to assist response efforts.

“I stand in solidarity with the families of the victims who today woke up to heartbreaking news. Their pain is my pain,” Arevalo said on social media.

This story has been updated with additional developments.

This post appeared first on cnn.com

India’s religious minorities have faced a “staggering” rise in hate speech over the past year, including from top leaders of the ruling Hindu nationalist party of Prime Minister Narendra Modi, according to a report released Monday.

The number of hate speech incidents targeting Muslim and Christian minorities rose to 1,165 in 2024 from 668 the year prior, a 74% increase, according to a report from the Washington-based research group, India Hate Lab. The majority of these, around 98%, targeted Muslims, either explicitly or alongside Christians.

“Hate speech in India in 2024 followed an alarming trajectory, deeply intertwined with the ideological ambitions of the ruling Bharatiya Janata Party (BJP) and the broader Hindu nationalist movement,” the report said.

Modi, who won a third term in last year’s elections, has long been accused by critics of fueling religious tensions and inciting violence against Muslims and other minorities since assuming power more than a decade ago.

His Hindu nationalist party has sought to turn India – a nation constitutionally bound to secularism – into a Hindu rashtra, or homeland for the Hindu majority, critics say, at the expense of the millions who profess minority faiths.

Modi and his BJP have repeatedly said they do not discriminate against minority groups.

The BJP’s national spokesperson, Jaiveer Shergill, condemned the report on Monday, saying it was published to malign India’s image.

According to the report, hate speech last year reinforced “longstanding Hindu nationalist tropes” such as the portrayal of Muslims and Christians as “outsiders,” “foreigners” and “invaders” who lack a legitimate claim to belonging in India, the report said.

It found that the BJP organized around 30% of last year’s hate speech events, a nearly six-fold increase from the year prior, with its party leaders delivering 452 hate speeches, a 350% rise from the previous year. The majority were recorded during the general election campaign.

Modi has in the past been accused of making Islamophobic remarks in speeches on the campaign trail.

“These high-profile hate speeches (by Modi and powerful regional leaders) were further amplified and reinforced by an arsenal of local BJP leaders, Hindu far-right organizations, and religious figures, who spread similar rhetoric at community and grassroots levels,” the report found.

Muslims make up roughly 200 million of India’s 1.4 billion population, with the population of Christians at roughly 27 million.

Under Modi’s leadership, Hindu nationalists have been appointed to top positions in key government institutions, giving them the power to make sweeping changes to legislation that rights groups say unfairly target Muslims. Textbooks have been rewritten to downplay the history of India’s former Islamic rulers, cities and streets with Mughal-era names renamed and Muslim properties have been demolished by authorities for illegal encroachment on government land and as punishment for alleged rioting.

In 2019, Modi removed the special autonomy of Jammu and Kashmir – India’s only Muslim-majority state – bringing it under the direct control of New Delhi. That same year, his administration passed a controversial citizenship law that excluded Muslim migrants, sparking deadly riots.

India prohibits hate speech under several sections of its penal code, including a section that criminalizes “deliberate and malicious acts” intended to insult religious beliefs.

However, some experts say hate speech has proliferated in India as a result of the judiciary’s reluctance to recognize hate speech offenses.

Anas Tanwir, a lawyer and founder of the Indian Civil Liberties Union, said the judiciary has failed to take concrete action against hate speech “despite clear prohibitions under various laws in India.”

The India Hate Lab, a project under the Washington, DC-based think tank Center for the Study of Organized Hate (CSOH), releases annual data on hate speech in the world’s largest democracy. They define hate speech by the United Nations framework which looks at any kind of communication in speech, writing or behavior that attacks or uses pejorative or discriminatory language based on a person’s religion.

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North Korea has treated hundreds of Russian soldiers injured in Ukraine, Moscow’s ambassador to Pyongyang told state media, as he revealed new details of the reclusive state’s backing for the Kremlin’s war effort.

Wounded Russian troops have been recovering in North Korean medical facilities, Ambassador Alexander Matsegora told state-run outlet Rossiyskaya Gazeta in an extensive interview published Sunday.

“A clear example of such a brotherly attitude (between Russian and North Korea) is the rehabilitation of hundreds of wounded soldiers … in Korean sanatoriums and hospitals,” he said.

The Russian envoy’s comments are the latest sign of deepening ties between the two countries, which have recently reached heights unseen since the Cold War.

North Korea has sent about 12,000 soldiers to Russia, according to Ukrainian officials and Western intelligence reports, following Moscow and Pyongyang’s pledge to help each other if either nation is attacked in a landmark defense pact signed last June.

About 4,000 North Korean troops have reportedly been killed or injured in combat after being deployed to Kursk since at least November to repel Ukraine’s incursion in the southern Russian border region, Ukrainian officials and Western intelligence said.

Meanwhile, Russia has also received thousands of shipping containers of munitions or munitions-related material from North Korea, and Moscow’s forces have launched North Korea-made missiles on Ukraine, according to US officials.

In his interview with state media, Matsegora claimed that North Korea had treated wounded Russian soldiers for free.

“When we offered to compensate our (North Korean) friends for at least part of their expenses, they were sincerely offended and asked us never to do it again,” he said.

Matsegora also said that children of Russian troops killed in Ukraine had vacationed in North Korea last summer, and Russia and North Korea are developing student exchanges.

Moscow supplies Pyongyang with coal, food, and medicine, he added.

South Korea’s intelligence service declined to comment on Matsegora’s remarks.

The extent of care potentially available to wounded Russian troops within North Korea’s dilapidated health infrastructure remains unclear.

Doctors who have defected in recent years often speak of poor working conditions and shortages of everything from medicine to basic health care supplies.

Some analysts also cast doubt on Matsegora’s troop recuperation remarks, pointing to Russia’s brutal military tactics as the war in Ukraine grinds toward its third anniversary.

Russia “has reportedly been sending wounded personnel back into assault groups without treatment, demonstrating a general disregard for soldiers’ health,” The Institute for the Study of War said in a news release Monday, “calling into question official Russian claims to be sending Russian soldiers abroad for treatment, particularly to North Korea.”

However, any arrival of experienced Russian troops, particularly officers, in North Korea “may allow the Russian military to work with North Korean forces and disseminate lessons from the war in Ukraine while ostensibly recuperating,” the US-based conflict monitor added.

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Shares of GameStop and MicroStrategy were on the rise Monday after Ryan Cohen, CEO of the video game retailer, posted a photo with Michael Saylor, co-founder and chairman of the largest corporate holder of bitcoin.

GameStop, day traders’ favorite meme stock, climbed more than 7%, while MicroStrategy, which recently rebranded as “Strategy,” saw shares rising as much as 4%. Cohen uploaded the photo over the weekend on X, sparking speculation that GameStop is plotting another strategy around crypto. MicroStrategy shares last traded up 1%.

The video game company had expanded into digital services in recent years by offering crypto wallets that let users manage their crypto and nonfungible tokens. However, the firm shut the service down in 2023, citing “regulatory uncertainty.”

Cohen, co-founder of Chewy, bought shares in GameStop in 2020 and joined the board in 2021 as GameStop became one of the key stocks in the WallStreetBets meme trading mania.

His e-commerce experience fueled hopes that he could help modernize the brick-and-mortar retailer, but the company still struggles to adapt to changing spending habits by gamers. Trading in the stock remains highly volatile and speculative as meme stock personality “Roaring Kitty” continues to spur buying from retail investors.

Saylor’s Strategy also has a fan base of retail investors as the firm touted its aggressive bitcoin-buying strategy. In the past year, the firm has raised billions of dollars through the sale of stock or convertible bonds for the sole purpose of purchasing more bitcoin.

Last week, Strategy said it’s almost halfway to its ambitious capital-raising goal as it went on a buying spree throughout the postelection rally. As of Monday, Strategy holds roughly $47 billion worth of bitcoins on its balance sheet, about 2.5% of the total supply.

This post appeared first on NBC NEWS

McDonald’s on Monday reported disappointing quarterly revenue, dragged down by weaker-than-expected sales at its U.S. restaurants following an E. coli outbreak just weeks into the quarter.

But shares of the company rose more than 4% in morning trading as executives predicted sales would improve in 2025.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Net sales of $6.39 billion were roughly flat compared with the year-ago period. The company’s overall same-store sales growth of 0.4% outperformed Wall Street’s expectations of same-store sales declines of 1%, according to StreetAccount estimates.

But McDonald’s U.S. business reported a steeper-than-expected drop in its same-store sales. Same-store sales at the company’s domestic restaurants fell 1.4% in the quarter; Wall Street was projecting same-store sales declines of 0.6%.

McDonald’s said traffic was slightly positive, but customers spent less than usual during the quarter. Over the summer, the chain rolled out a $5 combo meal to bring back price-conscious diners and reverse sluggish sales. The strategy worked, helping McDonald’s U.S. same-store sales tick up in the third quarter.

However, analysts have warned that value meals only work if customers also add menu items that aren’t discounted to their orders. McDonald’s executives downplayed those concerns Monday, saying the average check on the $5 meal deal is more than $10.

The biggest hit to McDonald’s U.S. sales came in late October, when the Centers for Disease Control and Prevention linked a fatal E. coli outbreak to its Quarter Pounder burgers. McDonald’s switched suppliers for its slivered onions, the ingredient fingered as the likely culprit for the outbreak. In early December, the CDC declared the outbreak officially over.

However, in the days following the news of the outbreak, traffic at McDonald’s U.S. restaurants fell steeply, particularly in the states affected.

U.S. sales hit their nadir in early November, but began rising again after that. In particular, demand for the Quarter Pounder, a popular core menu item with high margins, fell quickly in the wake of the crisis.

McDonald’s expects its U.S. sales to recover by the beginning of the second quarter, executives said.

“I think right now what we’re seeing is that the E. coli impact is now just localized to the areas that had the biggest impact,” CEO Chris Kempczinski said on the company’s conference call. “So think about that as sort of the Rocky Mountain region that was really the epicenter of the issue.”

The company hopes value deals, along with key menu additions, will help to fuel the recovery this year. In 2025, the burger chain plans to bring back its popular snack wraps, which vanished from menus during pandemic lockdowns, and to introduce a new chicken strip menu item.

Outside the U.S., sales were stronger. Both of McDonald’s international divisions reported same-store sales increases, bolstering the company’s overall performance.

The company’s international developmental licensed markets segment, which includes the Middle East and Japan, reported same-store sales growth of 4.1%.

McDonald’s international operated markets division, which includes some of its biggest markets, reported same-store sales growth of 0.1%. The company said most markets reported same-store sales increases, but the United Kingdom and some other markets saw same-store sales shrink in the quarter. One bright spot was France, which saw its same-store sales turn positive during the quarter after months of weak demand.

McDonald’s reported fourth-quarter net income of $2.02 billion, or $2.80 per share, down from $2.04 billion, or $2.80 per share, a year earlier.

Excluding gains tied to the sale of its South Korean business, transaction costs for buying its Israeli franchise and other items, McDonald’s earned $2.83 per share.

Looking to 2025, the first quarter is expected to be the low point for McDonald’s same-store sales, CFO Ian Borden said, citing a weak start to the year in the U.S., among other factors. Winter storms and wildfires in California weighed on restaurant traffic across the industry in January.

For the full year, McDonald’s plans to open roughly 2,200 restaurants. About a quarter of those locations will be in the U.S. and its international operated markets. The rest will be in the company’s international developmental licensed markets, including about 1,000 new restaurants in China.

Including its investments in restaurant openings, McDonald’s plans to spend between $3 billion and $3.2 billion this year on capital expenditures.

The company is also projecting a headwind of 20 cents to 30 cents per share to its full-year earnings due to foreign currency exchange rates.

This post appeared first on NBC NEWS