What are the Limitations of Online Payday Loans?

Everyone is skeptical of easy money. “Easy come, easy go,” as old saying goes. One might think that is the case with online payday loans.

But it doesn’t need to be. Online payday loans are where you can borrow money from a future paycheck. The lender needs to see you are employed, and that money needs to be paid back in one or several paycheck into the future. The faster you pay off an online payday loan, the lower your costs of borrowing.

Millions of working people are using online payday loans to get through occasional difficulties, which is often financial stress due to emergencies. They can be real problem solvers but they come with some restrictions, as follows:

• Online payday loans restricted by payscale, lender rules. You cannot just borrow any amount you choose. The lender will never loan you more money than you earn during a single pay period. And with most lenders, those loan amount limits fall somewhere between $300 and $1500.

• You must pay off your first loan before taking out a second one. If you were somehow able to pay off one loan with another, it would ultimately cost you too much. There are fees and interest charges on all such online payday loans. As a short-term solution, you need to pay them off in one or two paychecks for it to make economic sense.

• No credit rating restrictions. One non-restriction of online payday loans is how your credit history DOES NOT matter. It is a reason why so many people consider online payday loans to be an essential means for covering off on unplanned expenses.

To summarize, online payday loans are very available to anyone with a job and a checking account (where the cash is received, electronically and by the business day following your application). But they are to be treated as a modest-sized, short-term loan meant for emergencies only. Easy come, yes, but easier if you pay it off on a timely basis.

Technical Picture - Minor Losses

Another choppy session with minor losses all round. Precious metals and mining led the way down. After hours INTC beat by $0.06. JPM reports tomorrow morning. Economic calendar is full again tomorrow morning. Shanghai down 1% on speculation of another rate hike this weekend.

Successful bond auctions in Europe have strengthened the Euro vs. the $USD.

Gold also weak as the risk trade in jeopardy.

My ABX short trade. ABX and GDX approaching support and rising 200 SMA on dailies. I will be looking to buy support when we get there, but I'd like to see capitulation or a gap down open for a fade.

RIMM gap fill was a good fade.

Technical Picture - Markets Mixed

The markets gapped down on European debt concerns and made a fast move lower. The Nasdaq and S&P held above support of Friday's lows, while the DOW breached but held 20 EMA. Selling subsided after the first half hour and it was a slow grind after that, with tech and small caps outperforming.

The S&P carved out an inside day, another hanging man, in addition to the two from last week. Momentum has slowed, but supports are holding and the bulls have been persistent in owning close, so the bulls still have the edge. The rounded topping formation over the last week, however, is bearish looking. Rounded tops imply too much supply. Cautious trading as we await the inevitable correction.

HLS was spotted on the Esignal hot list. I placed the Fib. extension tool from PDC to early swing high and back down to retracement low. A very low risk entry at the base. Took a partial near 62% FE and let the rest run to full extension.

Above average volume indicates momentum. Price/volume contraction ahead of expansion gives us confidence in the setup.

AAPL was also a low risk entry after about 45 minutes of coiling.

SPRD was tweeted by GTOTOY and I followed at the next consolidation level - carved out nice handle.

Technical Picture - Bulls Defend Support

Increased volatility followed the release of the jobs data as the data was mixed: non-farm payrolls came in below consensus 103k vs. 150k; but the unemployment rate was better than expected 9.4% vs. 9.7%. The Nasdaq notched a new recovery high but the DOW and S&P failed to confirm. That was an invitation to short as depicted on the S&P emini futures chart above. Price made a fast move to support and managed a sharp retracement despite the lack of volume.

On the daily timeframe we see that last week's action carved out two hanging men sticks which foreshadow a correction. The more times we test support, the more likely it will weaken and give way.

On the $CPC chart below, we note that when call buying reaches excessively bullish levels, below 0.75, a correction is not too far behind.

Watch list names for next week CF $140.00, and MGA $60.00. Also, like AMGN after favorable patent ruling.

Also like DNDN which is getting positioned for a big move to the upside.

I will be attending a three day futures trading webinar starting tomorrow. Earnings season kicks in tomorrow with AA and APOL reporting AH.

Technical Picture - Markets Mixed Ahead of Jobs Data

Marginally disappointing initial claims figures gave the bears the edge in pre-market. A 62% retracement of the early slide was ambushed and the S&P emini futures extended a full measured move in 30 minutes of fast selling. After the midday chop, no follow through occurred as participants were cautious ahead of tomorrow's jobs data.

On the 60 minute chart of the SPY we see a double topping pattern taking shape. If the pattern breaks down, we could see some fast selling. On the daily (not depicted) we have two red hanging men, which, if confirmed, could be very bearish short-term.

$USD strength continued for the third consecutive session as price broke out of a month long bullish flag pattern. Energy, precious metals and commodities (excluding Ags) saw some profit taking.

Watching KOL closely for a possible bearish island reversal.

Not many good stocks to day trade today on my radar. Took a long entry in VRX as price pulled back into the BB and found support from the rising 5 period EMA on the 15 min. timeframe. Price/volume contracted (NR7) ahead of expansion, but the expansion was somewhat slow.

Technical Picture - Favorable Data Trumps Strong Dollar

Overnight trade had the bears firmly in control, but favorable ADP private sector jobs inspired the bulls to push prices higher in pre-market and positive ISM numbers at 10:00 emboldened the bulls even further. We have a possible double top on the SPY. I don't want to jump the gun, but the markets are extremely overbought and will need to correct shortly. I wouldn't be surprised to see a sell the news type scenario on Friday's job data.

Strong jobs means higher interest rates and lower bond prices. The $USD rallies on higher interest rates, hence today we had a much stronger dollar. As you can see from the $USD chart below, the $USD is flagging and wants higher. Eventually, the higher dollar will weigh on commodities, several of which have been ripping lately.

Higher interest rates are bad for gold. Why hoard gold, when you can get higher interest on your savings.

Friday's jobs data should be interesting. I doubt that it will be as bullish as the ADP report, hence we could get an opportunity for a short-term bounce in gold. The AEM chart below is very oversold and could be a good long entry especially on a gap down open.

PCLN broke out of a two month base today. On a measured move basis, target $452-$453.00

Technical Picture - $USDX Strength Weighs on Precious Metals and Commodities

Markets gapped up on strength overseas, but sellers quickly took control and the opening gap was faded. Not satisfied to simply fill the gap, the bears persisted, and helped along by a stronger $USD, sent prices all the way down to yesterday's gap support for tech and almost a full PD gap fill for the S&P. Small caps were hit even harder still. The only bright spot was the DOW, which managed to end the day on the plus side. Prices started to stabilize and bounce midday, and got a further boost from the FOMC minutes. However, late day price action became much more volatile and after hours, the bears are hard at work.

On the SPX chart above we note that open interest CPC is still too bullish and needs to correct. Today's stick not likely a hammer, more likely a hanging man, but that needs to be confirmed.

Note that the VIX, which has gone virtually ignored for months, is forming a bottoming pattern which looks like a mini inverse H&S.

Yesterday, the dollar held support and today it bounced, holding most of its gains into the close.

Dollar strength meant pressure on commodities and precious metals. Crude carved out a bearish evening star reversal pattern over the last three sessions.

Distribution in gold and silver. Look for more downside if the $USD strengthens. On the SLV chart we see multiple waves of RSI divergence to higher prices. This time I think we will see a deeper correction.

I still have a core swing short position in SLW which I was very tempted to cover at $36.00, but I believe it's going lower, so I'm holding on.

Coal technicals are still strong, but we have a bearish island reversal waiting to happen. Watch the futures in pre-market.

Semis are holding up well, but a correction would be healthy here given the steepness of the trendline.
MOO has already corrected, so I'm expecting a retest of the base. World food shortages are still problematic, and I expect Ags to be one of the leading sectors in 2011.

Commodity Rotation Cycle - In a commodity bull market, precious metals are the first to rally, followed by other metals, agriculture is third and oil is usually the last rally in the cycle. That said, it stands to reason, that precious metals will be the first to correct. Just a thought from a non-expert.

Technical Picture - Broad Based Gains to Start the New Year

Markets gapped up and broad based accumulation ensued to start the New Year. Both the Nasdaq and the S&P rallied beyond the top of the recent, tight trading channels. After breaching the channels, prices slowly reversed, forming rounded tops intraday. Rounded tops are bearish, implying too much supply, not enough demand at these prices.

I wouldn't be surprised to see a double top develop. Watch the 5 day MA intraday, for support. If a double top forms, we could see some fast selling.

The $USD bounced back today as we discussed last night. That accounts for the weakness in precious metals. Although the greenback failed to hold most of its gains into the close, it stopped the bleeding from last week and manged to close slightly above its 50 SMA.

NQ emini futures trade. Long on break of bull flag. Exit after higher prices fail to print red price bars, indicating a loss of momentum. Wish I had shorted, but was not expecting such a big afternoon slide, given the early momentum.

Early strength was faded, as many commodity names had moved too far, too fast. By EOD we had a lot of bearish shooting stars and doji shooting stars

MIPS broke out and held most of its gains into the close.

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Technical Picture - New Year 2011

The S&P finally broke through the 62% Fibonacci retracement level after stalling there in April and again in November.

The NASDAQ has clearly broken the secular bear market trendline. The next major resistance level is the 2007 high.

GLD versus the $USD. GLD looks poised to retest recent highs and the $USD looks weak after last week's retracement. If the $USD can't bounce tomorrow, it's going to look like the November bounce was an oversold, technical bounce, rather than a bona fide trend reversal.

Stocks to Watch Next Week

LVS - Strong buying on Friday. Looking for follow through and possible short-term trend reversal.

SLB - Basing for a BO

POT - Flagging after last week's channel BO. Overnight grain futures are strong, so ags could see more upside tomorrow.

AKS - Bull Flag

FNSR - Flagging

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