Microsoft Stock & the AT&T Cloud Deal; Buy or Sell?

Intro in this video I want to bring your attention to AT&T and Microsoft now you may have heard the news that they have joined forces and I'm gonna give you just a little bit of a history on the news of what's going on early on Wednesday Microsoft signed a multi-year deal to offer cloud computing services to AT&T Microsoft will be ATT's preferred cloud provider for non network applications 18t plans to become a public cloud first company by migrating most non network workloads to the public cloud by 2024 this deal is worth more than two billion dollars that's with a be two billion dollars all right so Microsoft and AT&T are jumping into bed together and AT&T is buying from Microsoft now generally when this type of an agreement occurs AT&T stock would fall right because they're the ones spending the money and Microsoft's stock would rise because they're the ones receiving the money so let's take a look at this these two markets these two charts and see how they're working out Fundamental Analysis today now we also want to take into consideration some additional fundamentals and I'm gonna show you some of that and we're gonna also look at some additional technicals and then we're going to decide whether it's time to buy or not and when a buy signal is occurring so that we can take advantage of these moves in the market and we also need to take a look at the broader market to determine what the broader markets doing because these stocks will definitely be affected by the overall broader market so we want to do a little fundamental analysis first but this is this is AT&T and then we're gonna do of course I don't want to skip the technical side because we got to remember these are all fundamental information fundamental drives a long term trend to the chart of the market but it's the technicals that give us the entry and exit points okay so we have to use the technicals in combination with the fundamentals so let's first come over here and let's look at Microsoft so this is the AT&T stock this is Microsoft and although they said that Microsoft stock rose and that would be the traditional occurrence of receiving a two billion dollar contract it only rose slightly and now it's falling and it's down today so we need to take into consideration the a broader market again we also need to be taking into consideration the technicals here and we also need to be taking into the market - what the hedge funds and the activities that the big guys are doing where are the big money's coming from because this is the big money that moves these markets alright where are the big money where is the big money putting their their their funds now think about the stock market every two weeks we get a great big huge influx of everybody you know it's almost every two weeks so there are a lot of companies that do it on a 30-day time frame but most companies do payroll every two weeks and so they pull out the money from the IRAs and the self you know the simple IR is the 401k so all that kind of stuff and they send that off to Wall Street Wall Street puts it into the stock market every two weeks it gets a huge influx from payroll and these big hedge funds are putting it into the market where are they putting it where are they putting that money cuz that's what we want to know we want to know where the big boys are put their money now they love stocks that have dividends and so we want to make sure that we're following stocks that have dividends if we want to do what they're doing we want to build a portfolio for retirement you know there's different strategies there's different things you can do you can day trade you can build portfolios for a retirement you can just you know you know build portfolios for intrinsic value you know all the lots of different strategies and we cover all those and we talk about those over time as we go through these videos and talk about the different markets and go through the video lessons but nonetheless you know we can't cover all of that in one video but the the fact the matter is we want to be looking where the big hedge funds are trying to put their money so let's do a little fundamental analysis on a couple of these on these two markets all right should we and of course my favorite fundamental analysis tool if I can get it to come down here on the Analyst Ratings screen my fundamental favorite fundamental analysis tool is tip ranks and we're gonna come in here and I'm gonna pull up I'm gonna pull up MSFT and we can see in here this is MSFT analysts ratings all right so this is what the big analysts on Wall Street are telling us that these markets or what the what this market in particular is doing now I want to say you know if you're not heard of brakes tip rinses we're kind of associated with them in some in some way in some degree so they do give us a cup on code for you if you're interested in subscribing to their service I have a subscription service and believe it or not I didn't even get to use the code so I actually paid the full amount but you can get a twenty five percent off and here's the coupon code if you're interested in subscribing to tip rings it's edu one nine all right edu one nine and that will get you 25% off of their service I need to always mention that because a lot of people like to have some of these research tools that I use and this is my primary fundamental research tool from tip ranks alright and they've given us a twenty five percent coupon code for any of you guys any of my students that's why it's edu one nine any my students are able to get that discount so anyway what's going on over here is we want to look at the analyst rating all right in the analyst are giving us three points so this is a typical analyst type of a rating you know they're gonna say on the high side we're gonna expect it to be at one sixty on the low side we're gonna be at ninety so we as individual investors are going well what does that mean to me so we need to look around and we need to do a little bit of our own work as well not just looking at what the analysts are saying you know because it's their opinions are you know they've got pretty good track records but it's still they have all oftentimes you have to remember that they're working on a much different scale than we are they're managing you know huge multi-million multi-billion dollar of hedge funds and we're dealing with our own individual little retirement account so this is coming down to the quantity is what we got there they're saying that you know there's 21 of them saying that this is in a buy mode strong buy and then we have one that says hold and one that says sell so but they've also got some different projections on here and where they anticipate this market going out into the future so that's kind of analysis here with these guys we've got some nice strong buys on Microsoft individual investors we don't care about financial bloggers we don't really care about corporate insiders this is nice because this tells you you know if the insiders are buying or holding or selling but don't really know there in 10 why they're doing what they're doing it's nice to know though it's a good report and we'll look through it in greater detail on occasion news and sentiment of course this is where we come in and find out how much news is being reported about a stock which is very important especially when we're looking at IPOs right because IPOs we want to have lots of people looking at IPOs because hedge funds and mutual funds they don't generally get invested into early IPOs very often you know they're more of a traditional type of investor and they're looking for these big great big companies safe-haven type companies that build equity and over a long period of time and are stable and aren't going to lose people's 401ks with a lot of radical moves you know and they of course want stocks that are gonna be giving dividends and all that kind of stuff they're not usually as interested in the IPOs so the IPOs are driven primarily by guys like you and me you know the retail traders out here who get an excitement about a new company and want to be a part of that and so we're the ones who kind of push that and the way that gets done is through the news media right if there's a lot of positive information out there about what's going on then we can come and find that in the news media of course it's not that you know the individual investors don't move big companies like Microsoft - they certainly do but that's just a little bit of insight into news and sentiment and that's why this is such an important report for us so we've got different types of news we got bullish news and bearish news and 94% of news on Microsoft right now that's out is very positive 6% is bearish now we can also remember tomorrow are actually tonight today after after after the market closes Microsoft gives their earnings so we got an earnings report coming out here with Microsoft and we will go in and look at the charts and see if we want to play against that earnings report as well so now let's come down here where this is the big one this is the hedge funds this is what we want to look at now the problem with this is it the hedge funds have been decreasing their holdings over the last the the blue chart is are the hedge funds and the black line is the underlying price of Microsoft so Microsoft stock has actually been climbing even though the hedge funds have been a little bit bearish on this market they've been pulling their money out look they've decreased their holdings in Mike soft by 17.2 million shares in the last quarter so that's like why are you guys pulling your money out if you know we got some positive information on Microsoft what do they know that we don't know what do they know that we don't know they're very negative they're very negative on Microsoft so we need to take that into consideration when we're looking at Microsoft so now let's go look at the Microsoft chart given that a little bit of insight Microsoft and they've been pulling their money out and look what's happened here now you think that the big hedge funds don't look at the technicals ah that's not true they definitely are looking at the technicals but they use the technicals to help them Technical Analysis understand entry and exit points and you know the the movement of the market they are the ones who drive the market therefore they are looking at the technicals I can guarantee it I've been to the Chicago Board of Trade taught in the education center there with some guys who run some great big huge funds and they will definitely tell you they are looking at the technical side of the market and they understand and they know what Elya ways are they know what Fibonacci rulers are they know what these projections and retracements are so that's why we as individual traders need to learn this stuff ourselves so that we know what they're seeing and what they're thinking I mean we want to know as much about what they're doing with their billions of dollars as we possibly can and so that's why trend lines areas of support and resistance and of course the fundamentals are important to us so I just want to come through and analyze this market very quickly from a technical standpoint and show you a little bit of what I'm seeing in here we come in here and we're gonna draw this left shoulder this head this neckline alright this neckline and then the right shoulder down here this brought us a nice neckline break down here at the bottom of this lower trend and you can see that blue light system which is you know the blue lights comes from the bulls and bears and the bulls bears is a plug-in of course to the software they'd attract and trade the terms of price bars red yellow and green gives us these Elliott Wave trend lines so you can see the breaking of the trend line right there with the blue light which corresponds with that neckline of the head and shoulders formation so that's where we kind of got a strong indication that the market was changing direction and becoming bullish this is what that all meant for us and again I can guarantee you that the hedge funds saw this all right and as we come in here and we see this now we have a nice 3dr pattern this is the Elliott Wave three dry pattern drive one drive two and then of course we come in here with drive three and then these are our little crossovers the breaking of those trend lines and giving us that information now obviously if you don't have the bulls and bears it's very difficult to see this you could turn the bulls and bears off and as you can see it's very difficult to know what's going on with this market turning on the bulls and bears in track and trade again as I always say it's like turning on the lights in a dark room so now we can see the patterns we can see the bullish trends we can see where the markets changing from bullish to bearish to neutral again the yellow is the neutral zone and the bulls and bears all calculated based on Fibonacci and those yellow dots are those yellow those yellow bars are the market going through are going through the Fibonacci sequence so we're going through the Fibonacci neutral zone alright so as we come up through this nice big long bullish trend we get to the top of the third wave which is very common with the Elliott Wave is if we come in here with our little Elliott Wave tool you can see that we started this is the head and shoulders formation so this is x one two three we get four right in here that breaking those blue lights this would be five we have a B C you can start it down there at the head or generally will oftentimes start it right here off this first leg so this is x one two three four five ABC this is just kind of a nice little Elliott Wave in there of course we can turn on the computers Elliott Wave Auto zigzag tool and it will come in here if we want to spend the time to draw that out for us and calculate those calculations with those Fibonacci calculations but you know once you get good at identifying those and seeing those using the bulls and bears yeah you can you know you can use the zig zag if you want to or not I could just visualize these using the bulls and bears and that's why I don't oftentimes turn on the zig zag because I can see it in the bulls and bears so these calculations if I want to see the calculations I can come back and measure in there and we can do that little type of measurement see the market rallied up on this first leg our second leg pulled back into the Fibonacci sweet spot rallied again and we can measure each one of legs individually if we want to and that's how this world of technical analysis works okay so we're gonna come in here and again we're gonna draw our trend line across there you can see we got the the area of resistance coming across the top of these bars coming into a cross over at the again at the same spot as the blue lights we always want to have our trend lines match the blue light this is breaking the mark started rally once again so what are we seeing now I came there that's all the history just to kind of prove a little bit about how this technical analysis stuff works again we have to realize that technical analysis is not perfect it's not going to do the same thing every single time it's just probabilities based on the fundamentals and what we've seen in the past when markets move through certain wave patterns we anticipate them to continue through areas of support and resistance through price and chime so now as we come through there and we're gonna draw our trend line back up through there one more time we can just draw that trend line in there again make sure we kind of corresponding with those blue lights and where they're at you can see the breaking going from the green to the yellow and that's right up here where this market broke so then you ask yourself well the hedge funds have been pulling their money out you know is this why this markets gonna fall you know they're not very bearish on this market they're there as it says in the in the hedge fund list here they're very negative actually but they just wrote one a two billion dollar contract with AT&T right so what are we gonna do with this Microsoft contract now Before we jump in and start making trades on it saying well what are we gonna do because this is actually a sell signal right this is actually a sell signal we crossed over that trend line through the yellow lines that's a breaking of the trend line to a bearish side do we want to be buying a put option in here are we bearish enough on the market that we think it might be falling to a significant degree with the fact that they just want a two billion dollar account do we want to be taking a short position or do we think this is just going to be a small profit taking pull back and then rally once again and rally once again or do we think that we want to take a look at a little bit more information let's let's come out and look at the broader charts of the broader market okay let's come out and look at the I want to look at the S&P at this point this is the S&P and you can SP 500 see we're along 13 contracts in here we're down 669 dollars on this mark of the SP we were you know we got some we actually did a call and a put in here we made some money on the put as this thing started to come back but then we liquidated that position as we broke across and now the markets coming back down or losing money on our calls on the S&P so we have to decide what we're gonna do we're down six hundred eighty nine dollars on this particular position with these options we got sixty four days left to go let's draw our trendline in here and the question has to come in here do we think this is the big sell-off that everybody's been comin been predicting everybody's been predicting that the market's going to fall really hard in here and you know this this is one of the reasons why all the technicals are indicating that the markets gonna fall and then when you have something like this where you say all the hedge funds I've been pulling their money out of these big markets and they're very negative on a long position you know it has to make you wonder if there's something else going on and whether everybody's anticipating a pullback like this now we will of course we'll go look at AT&T here in just a minute and do kind of the basically the same analysis on AT&T and see if the hedge funds have been doing that over there but this is kind of our 3dr pattern on the longer-term trend if you take a look at this this is drive one right this is drive to right and this is our drive three so we got drive three in here with the top of the drive three so do we want to be buyers at the top of the drive three no of course not that's the top of an Elliott Wave pattern we don't generally want to be buyers up there now we've got long positions on here with this market breaking and going short the question is we've got 64 days do we want to hang on to this in anticipation of the possibility that the market might just pull back and then turn around and rally once again well I don't want to take that risk so let's just come in here liquidate we're gonna liquidate all of these just take them off the table right now cut our losers short letter winners run we didn't really make anything off of that thing that was kind of a scratch trade at best we made a little bit on the put when we liquidated it but not really because it came back against us and we had to get rid of it before it started losing money and then the option started to rally we went up there and time kind of just took it away and then not really a good position I was real pleased with that position anyway I want to be getting in on these arrows these breaking on these so this is actually should be a short position we should be picking up a call option but I'm not really anxious to be going short against the market either right now so we're gonna have to wait and see but this is the S&P and I might be picking up some some additional we're definitely at a decision point we could come in here with some options and we could pick up a strangle or a straddle and I might do that I have to do a little bit more analysis decide what I want to do I'm right now focused in concentrating on AT&T and Microsoft this is the broader market this is something I want to be aware of where we're at things look like they need to fall and pull back and make a retracement I just don't know how far okay so if we do the shorter term timeframe we just draw a trim line in there for the broader market and say the market should come back somewhere into this 50% level right Broader Market but we could also have just a little pullback like this nothing says we have to have a big major pullback we could definitely get a pull a rally a break here this is definitely a pullback we're there that we're there it's happened we broke the trendline it's just how far is it gonna fall back well traditionally speaking it comes back into the sweet spot and then starts to rally once again so that's kind of where we're at with the S&P and in our anticipation now the fundamentals overall more broader market though the US economy is still doing really well we're we're above 3% on the GDP big companies are making money they're all happy why this market would pull back you know there's really no reason to see that other than the fact that we got a little bit of problem going on with China and the tariffs but that's not really been affecting the the overall broader market anyway you can see that you know that we've had these China talks clear back into December and and that the markets done nothing but break all-time new highs through that entire talk so how much is that really affecting us the other thing is that the feds said that they were gonna lower interest rates and they kind of made that they first right in here they said they weren't gonna lower interest rates and then they said they were gonna lower interest rates the market started to rally once again so now the market started to come up here in rally break all-time new highs you know multiple times in a row and now they're starting to you know you hear the rumor that well maybe we won't raise interest rates again we'll just kind of hold him were there you have to ask the question has to be asked how you know how high how hot does market at to get where they raise the interest rates lower the interest rates and that's the big question that's why whenever those guys speak you know we all jump so this is uh this is a rally that came from them saying hey there's a possibility we could lower interest rates after all because mark started to fall when they said that they were going to raise interest rates and then it started to rally once again so now they were that when the market was trading right here they said it's too hot too far too fast and we need to raise interest rates to slow things down well what do you think they're thinking about right now if this was too hot too far too fast and we need to slow things down let's say we're gonna raise interest rates well then the market fell and then they're like oh maybe we shouldn't have said that and now it's back up here now what do you think they're thinking I don't know they said that they might lower interest rates but with the market up that high they might not do it well if that's the case they're thinking they're not going to do it then the market might fall again so that's kind of some of the thinking that's going on in the overall broader market so given that information Time Sequence and oh I want to do one more thing for you I got to do it I can't stop myself I know this video is getting a little long but hopefully you're interested in this and we can go and talk about this stuff for me this is like yeah I just love it I can talk about it all day long so here we go do we come in here and look at this this is our fibonacci time sequence I'm going to put those 144 days right there on the bottom on that peak you can see we came in here with a nice little decision point right there around the 89th day the 55th day came in here at this peak we came in here at the 34th day at that low this market started to rally we had a little break and peak right in here and the 31st day now look where we're at we're coming into this big sequence right up in here so this is to me a really important timeframe and I've been kind of waiting for this to happen and I've talked about it in multiple videos and you can see these blue dots coming up in here and this market coming up in there and we're coming up to this big decision point right here and what's supposed to happen to this big decision point well based on the the movement of the market right if Decision Point we draw our zigzag in there we draw our X we'd go up down up down up down all right so something's supposed to happen right in here based on Fibonacci and this markets been pretty good on the fibonacci sequence it's been following it pretty much like a train on Rails and again if you think that those big hedge funds they don't have that little calculator ruler you're dreaming because they definitely have those big hedge funds have that root where do you think I got it from all right where do you think we got that ruler from in the first place you think I made it up no I didn't make that up these big boys have this stuff all right and they do their timing just like we do and the reason we do our timing is because they do and so we want to follow what the big money is doing and hey this is what it looks like things are happening X 1 2 3 4 5 ABC 1 2 3 and this mark is getting ready to fall so we just want to bring that to your attention so back to the original story back to Microsoft let's start back here to Microsoft what are we going to do this market broke and we're gonna do the same thing we're gonna come in here with our Fibonacci timeline drive that in there and we should get something relatively similar right to the overall broader market this is one of the big players in the S&P and we're gonna come up here and where we at we got our let's see let's put this right on the bottom so we're right on the bottom here with the 144 a we got our rally points our turning points at 55 another turning point at 34 another turning point at 21 we're right back up in here a 5 days we're starting to get really nervous alright so in my opinion this is nerves coming into these this closing point and that's what we're looking at we're seeing people are getting really nervous about this market continuing to rise higher based on the the the overall longer-term patterns of these technicals and the fundamentals but the fundamentals are strong that's what's the problem why are these markets falling if the fundamentals are strong if the fundamentals are strong and the markets are starting to fall the broader market is starting to fall you have to ask yourself why the underlying fundamentals are strong 3.5 3.2 GDP we got you know we got no wars or rumors of wars we haven't we haven't you know we haven't done over and beat up on Iran this week or last week you know they've been pretty quiet you know since we had that little cursed kerfuffle a little while ago China's been quiet in the negotiations over there the only thing we've been having is just you know the the typical Republican versus Democrats we hate you they hate us can't get along but you know in my entire lifetime when is that not been happening yes but of course it's a little ramped up right now but nonetheless you know politics don't drive the stock market all that much now it doesn't say they don't they definitely do but not all that much I mean the presidents can can move the market a little bit with a few words but for the most part Congress and you know they can't really move the market all that much with all their rhetoric there's too many of them that can say you know positive negative things against them you know one way or the other nonetheless you know we try to be objective when we're looking at our politics in the markets we don't want to take sides because all we're really interested in finding out what's going to move the market and what's gonna make us money and that's the real crux of the entire political world for us so try to stay neutral when it comes to politics think about it neutrally don't get emotionally involved because you get News Bias your emotions involved in the stock Mart making bad decisions based on emotion and you see it in the news all the time and I'm going to have I have to point this out CNN is very bias and so if you watch the CNN news everything is always negative and the stock market is always gonna fall and everything is bad so and they tie that to the politics so you have to be really careful with the news sources that you pick as well which is you know why I love this this this software from from from tip ranks because we can come in here and we can look at the news sentiment and we could see all the news sources whether they're bullish or bearish on the market so we can kind of look at them from an overall standpoint without you know taking personal biases into consideration all right so there's Microsoft and it's falling we can take a put you know we can take a short position with some puts but we haven't even started to talk about AT&T so now we have to come over and look at AT&T and the first thing we ATT Stock want to do of course is I know and we're running close here you know this video is getting a little long I want to kind wrap it up so we'll go through 18t very quickly this is kind of where the analysts are they're saying we got five buys two holds and no sales they're anticipating you can see they're projections higher even or lower whatever that doesn't really help us so we don't care about individual investors financial bloggers corporate insiders and again I'm more interested to in the interest of time to look at the hedge funds we'll jump right down here to hedge funds and they have been decreasing their holdings by four million shares last quarter so they dropped really hard and started to dump their shares out of AT&T as well which of course shows them as being very negative so we have to be careful because the big money is coming out and then it's generally the big money that pushes the markets higher so if the big money is coming out of both Microsoft and out of 80 and they just did this two billion dollar deal move you know two billion dollars over from a 10 that's over the next two years so you know they're gonna dump two billion dollars out of their coffers today and into Microsoft's today that's kind of gonna be spread out over time and we have Microsoft coming out with our earnings and of course none of that money is going to be reported in the earnings because this is the earnings for the last quarter this is going to be coming up we have to take that into consideration as well what are we gonna do here's a AT&T and they're falling if we come in here and draw our trendline you can see that's this big trend line comes in right underneath all this areas of support and that blue light kind of drifted a little sideways because of the sideways trend here and then the market started to rally in which pulled you can see the dots extended and they started to pull that up there as we started to come into a crossover and notice how it crossed over just almost right perfectly right there that's a great little sell signal right there and down this market win you can see that repeated over and over and over again as this market kind of rallied and then pulled back and then rallied and pulled back and then rallied and pulled back now if we're trying to build a long-term portfolio and we're trying to go for strong stocks that have good dividends on them and we're building a a retirement portfolio 18t is definitely something we're gonna want to have in our long-term portfolio but we the the thing and I hate worst of anything at all though I mean the one thing I really hate is when you get into a market and the very first thing you start losing money you know you're like I'm gonna buy AT&T because they're a really strong company and they're gonna be around you know clear into my retirement no problem I can trust my money with AT&T and you put your money in there and the first thing that happens is you just watch for the next three months watch the money you know watch your position die there's nothing worse than that and I hate that and I try my very best to show people that you know you need to buy the valleys and sell the rallies I know you're gonna stay in this market for you know 20 years 10 years 15 20 30 years you're looking for the long-term haul but nobody likes to put their money into a stock only to see the very first you know right after they buy it that it falls and tanks the problem with that is people don't like to buy markets that are doing poorly they like to buy markets that are doing well well what when is that happening there's 1a markets doing well here's what a mark is doing well here's when the markets doing well here's another spot where the markets doing really well here's another spot when the market is doing really well well where did most retail traders buy into the market they bought into the market at each one of these points where the markets doing well they want to buy a market that's doing well they don't want to do a biomarker that's doing poorly so they bought all of these peaks and then of course as soon as they buy it the market drops and you know all the traders take their money so all the other traders who are taking short positions take their money so don't buy a market that's doing well and that's the name of the game by the valleys and sell the rallies we don't want to be buyers at the top of a green trend well you know like well how do I know the green trend is gonna end well look at the intercepts of the blue lights the blue lights are gonna intercept that green trend and when they do the market generally Falls market starts to rally the intercepts with the blue the market Falls market starts to rally intercepts with the blue dots and the market starts to fall that blue that that track and trade Bolson bears indicator is again I can't say it often enough it's like turning the lights in a darkroom so we want to buy in the valleys in cellar alley so we want to time our entry points and if we're trying to get into this market for the long haul and we're trying to go for you know years and years and years and years of holding a position granted if you bought it at one of these peaks and it fell back and you lost you know 20 30 percent of your your investment and then it came back for you and rallied and started to come back again here you're gonna be okay in three months but may alive that nothing you know - is your hopes of being a trader of buying into a stock that's doing well only to have it fall and lose 20 30 percent right off the bat and then you're like then you're shy then you're scared then you're like Oh order the stock market thing is scary but if you got the right tools you learn just a little bit of skills technical analysis some of these tools can help you know how these hedge funds are working it can save you a lot of stress and aggravation you know which stocks are providing dividends you want to get these dividends from long term stocks but the thing about dividends is they will not pay for it a fall in the market you know dividends are just like a little icing on the cake the the stock increasing in value is the cake itself and you don't want to just sit around trying to you know scoop cream off the top of the cake and think that you can live on on icing you can't so remember stocks have two types of value they have intrinsic value and they have extrinsic value all right the extrinsic value or the the value you know it's basically like what we talked Intrinsic Value about in options you hear me say that in options but a stock has intrinsic value which is how much the stock increases in value from this point here to this point here right and if we come in here and let's let's let's turn that to percentages it's a twenty seven percent increase from this load of this height that's intrinsic value now over that time frame one two three four five six seven months maybe you know maybe AT&T paid out some dividends and they probably paid out what one-and-a-half two percent maybe three some of these companies will get up into four or five percent but usually if they're paying out above five percent and their dividends that's because the stock is falling okay and so their dividends go up because dividends are calculated on a basis you know they use the the stock in their in their calculation therefore if the stock falls the stock price Falls that increases the value of the dividend and so if you get it real high dividend you're like oh wow I want to get that company they're paying out a 10 percent dividend well that's because of probably the intrinsic value on the stock is tanking is probably falling through the floor and there that that forces their dividend dollar amount up and they're kind of in kind of incentivizing you say hair our stock is falling through the floor we'll pay a higher dividend if you'll hang on to it but don't do that don't fall for that you want to buy the valleys and sell the rallies and if a stock is losing 27 percent of its value a three to four percent dividend is not going to help okay bail out with dividend to secondary okay so we don't want to be trying to stay into a market for in hopes of getting our money back in ten years how old are you you want to wait ten years to get twenty percent no just get out that's why we use stops and we don't want to let our once we get in we don't want to take big losses we don't want to take the intrinsic value a lot of people have that in their head they're like well I I don't mind if I lose some money when I first get in because I'll gain it all in in my dividends no no you won't know maybe in the future maybe if you know but are you willing to sit through a twenty thirty percent drop in your stock value to pick up a one or two percent dividend it the logic isn't there it's not sensical so let's be strategic about our entry into the markets let's pick stocks if we're gonna try and hang on to a long period of time let's pick stocks that have nice dividends and then let's buy them in the valleys okay don't buy a stock that's doing well buy a stock that's been doing poorly and starting to rout round out at the bottom these are the time frames these are the areas that you want to be getting into these stocks down here all right not up here when the stock is doing well and it's a big problem that a lot of new traders do they want to buy stocks that are doing well and they buy at the top of these big green trains okay I've rattled on long enough this is a TNT it's starting to fall what we're going to be looking for is we're going to be looking for the market to pullback and then we're gonna be looking for one of these valleys one of these arrows when these valleys change over red hasn't turned red yet it's still yellow stand in the neutral zone we haven't we don't know what this bar is gonna be whether it's gonna turn red or yet or if it's still yellow but as this market Falls we're gonna look for the market to turn around start to rally once again we're gonna start looking for the hedge funds to start increasing their their positions in the markets but you know what by the time we find out that whether the hedge funds are increasing or decreasing their holdings it's already too late markets already doing well because they've started to move the money in and then we get reported and we find out but the markets already started rally so we need to watch these technicals that's why the technicals are so important for us as small speculators we need to be able to watch those trend lines and those speculations make those speculative turns and we put our money in there and if market goes against we should get right back out all right we don't take big risks we wait we can do it again right we get another signal we go ahead and we put our money in there and we do it again and we don't have to put all of our money at once that's another fallacy a lot of people oh I'm gonna get into AT&T and I want to put 25% of my holdings into AT&T and so they dump 25% of their holdings into AT&T and then AT&T Falls and then they're like aw crap I'm losing 25% of my money on which is 25% of my whole portfolio no we start off with small positions we call them test trades test positions and we put test trades in you know and I've gone on and on and on and I'm you know so many things I want to tell you guys so so that's just my quick take on AT&T and Microsoft there's no buy right now unless you want to try and take a short position but I am actually just looking for the opportunity to get into a long position on a pullback and that's exactly what we need we need that to happen we need a pullback to come in to occur we need the market to turn around start to rally once again gives us an opportunity to put some money into this market and watch it go again all right so that's AT&T and Microsoft a little bit of news and where they're going and of course if you give me a like share and ring that little bell make sure you subscribe to our Channel and hit that like button if you like this video and I'll do more like it if you like little shorter videos don't hit that like button but if you'd like me to go into some great detail like this and spend a little bit of time with you and talk a little bit about the markets go ahead and hit that like 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