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Updated: 2017-09-07T21:19:09.655-04:00


Believe It or Not, the Bulls Still Have Plenty of Muscle


(Photo credit: Concentrated Passion)Russell, NYSE Composite still pushing upwardBy Sam Collins, InvestorPlace Chief Technical AnalystNew York, Sept.26, stocks to watch .- The S&P 500 closed lower for the fifth consecutive session Wednesday, marking the longest losing streak of the year for the broad-based index. Since it scored a new high last Thursday, the index has fallen 1.9%.The Dow Jones Industrial Average also fell, suffering from the impact of a 1.45% decline in the shares of Walmart (WMT). Early yesterday the giant retailer was reported to have cut its orders from suppliers, but the report was labeled as “misleading” by a company representative.A better-than-expected durable goods report for August and an increase in the sale of new homes in August helped to offset wrangling on Capitol Hill. No agreement over the debt ceiling appears near, and funding runs out at midnight on Sept. 30.At the close, the Dow Jones Industrial Average was off 61 points at 15,273, the S&P 500 fell 5 points to 1,693, and the Nasdaqgave up 7 points to fall to 3,761. The NYSE traded 641 million shares and the Nasdaq crossed 428 million. On the Big Board, advancers and decliners were close to even, and decliners edged out advancers on the Nasdaq by 1.1-to-1. Click to EnlargeThe Russell 2000 made a new all-time high yesterday with its intraday high of 1,082. The Russell 2000 — like its cousin, the Nasdaq (see Wednesday’s chart and comment) — is trading within a bull channel, but unlike the Nasdaq, it has no resistance above it to hamper further new highs. MACD is slightly overbought but could become more overbought as the index continues its dogged advance. Click to EnlargeThe NYSE Composite is a broad-based index containing all stocks traded on the Big Board. Its chart pattern is much like that of the S&P 500 (see Monday’s chart), which recently made a new all-time high. But the NYSE’s new high at 9,906 — made last Wednesday — was unlike the S&P 500 in that it has not seen a new high since May, and its all-time high at 10,387 was made in October 2007.Conclusion: Despite yet another down day, the short-, intermediate- and long-term trends still are bullish. The continuing power of the bull market is supported by both the broad-based indices as well as the small- and midcap stocks. The ability to keep trudging along despite the overwhelming negativity coming from Washington is a powerful argument in favor of the bulls. Bearish momentum is absent.The strongest sectors continue to be industrials, tech & biotech, consumer discretionary, biotech, pharma, housing, materials and financials. Bonds and bond substitutes have been the weakest.Related articlesIf You Have a Burning Desire to Buy, Here's Where to Look ( the Dow Jones industrial average fared Tuesday ( the Dow Did on Tuesday ([...]

Dollar and Treasuries likely to lift Gold


English: A sample of crude oil from Haenigsen, Germany. Deutsch: Flasche mit Erdöl (Photo credit: Wikipedia)By Colin TwiggsSydney, Sept.26, stock watch .- Spot gold continues to test support at $1300/ounce. Failure of support would visit the primary level at $1200/ounce, while respect would test $1440. Breach of the downward trend channel indicates the primary trend is slowing, but recovery above $1440, and a primary up-trend, seem some way off — as does recovery of 13-week Twiggs Momentum above zero.The two-hourly chart shows breakout above resistance at $1330. Retracement that respects the new support level would signal a rally to test $1375, improving the chances of a bottom. Dollar IndexThe Dollar Index broke primary support at 80.50, warning of a primary down-trend. Follow-through below 80 would confirm. A 13-week Twiggs Momentum peak at zero also suggests a down-trend. A falling dollar would boost gold prices. Recovery above 81 is unlikely, but would warn of a bear trap.The yield on ten-year Treasury Notes broke support at 2.70 percent, warning of another test of 2.40 percent. Penetration of the rising trendline would strengthen the signal. Falling treasury yields are also likely to lift precious metal prices (because of the lower opportunity cost). Crude OilNymex light crude broke support at $103/barrel and its rising trendline, warning that the up-trend is slowing. A test of medium-term support at $98/barrel is now likely. The wider spread with Brent Crude is an indication of tensions over Syria which threaten supply. CommoditiesCommodity prices continue to fall, with the Dow Jones-UBS Commodity Index headed for another test of 124 despite a resilient Shanghai Composite Index. Recovery above 130 is unlikely, but would confirm the earlier double-bottom reversal and a primary up-trend.* Target calculation: 130 + ( 130 - 125 ) = 135 ...Related articlesStephen Twigg: More academies, more freedom - my plan to keep London top of the class (, Index and Commodity chart notes - 25 September ( Forex: Trendline Trading Tactics ([...]

Top 10 Stocks For 2014


EI-EPD (Photo credit: markyharky)By StreetAuthorityChicago, Sept.26, stock trade .- It's one of our most popular pieces of annual research. Literally hundreds of thousands of investors have read -- and profited -- from this advice. And since we first started publishing our annual Top 10 Stocks list, we've beaten the market seven out of 10 years. For comparison, shares of Warren Buffett's Berkshire Hathaway (NYSE: BRK-B) have only beaten the market five out of the past 10 years. I've shared one of these stocks with you already. Last week, I told you about Philip Morris International (NYSE: PM). This tobacco company, while hated by most people, has raised its dividend nearly 85% since spinning off from its parent company in 2008. And in today's article I'll tell you about another one of my "Top 10 Stocks for 2014." But before I continue, I want to make something clear. I can't provide you with all 10 of my "Top 10 Stocks for 2014" here. I've reserved the report exclusively for my Top 10 Stocks advisory subscribers. It wouldn't be fair to them to give this list away to everyone. But I can give you something even more valuable than just a couple of stock picks... You see, I want to show you why these stocks made my list for 2014... and how you can find similar stocks on your own.I think my 2014 ideas may end up being the most profitable in our history. As you can see in my chart, this group of 10 stocks has already beaten the S&P during each of the past five years -- that includes the sharp bear market we saw in 2008 and the powerful bull market we enjoyed in 2009 and 2010. In fact, if you had invested $10,000 into this group of stocks just five years ago, your investment would be worth $22,950 as of the end of September -- a 129.5% total return. The same investment in the S&P would be worth just $14,590 -- a 45.9% return. So what's the secret behind this performance? Well, after years of research, I've found that companies with a few basic characteristics are the ones that consistently beat the S&P... -- Companies that enjoy huge (and lasting) advantages over the competition. -- Companies that are buying back massive amounts of their own stock. -- Companies that pay investors each and every year by dishing out growing dividends. I've found that more often than not, companies that match these three simple criteria are the ones that make you the most money long term. It makes sense -- strong companies that take care of their shareholders tend to do better over the long run. These are the stocks that consistently create value for their investors year after year, delivering some of the market's biggest returns. Take Enterprise Products Partners (NYSE: EPD), for example. EPD made my "Top 10 Stocks for 2014" list precisely because it meets two out of the three characteristics listed above. Does EPD enjoy huge advantages over its competition? Absolutely. The company is one of the largest pipeline companies in the U.S., with 50,000 miles of onshore and offshore pipelines. Does it pay a steadily growing dividend? You bet. Since 1998 EPD has raised its dividend 202%... from $0.225 per share every quarter to $0.68. It doesn't take a Ph.D. to understand that this is the sort of stock that should continue to make money for its investors year after year. And in recent years, EPD has done just that. Since 2008, shares have returned roughly 170%. That includes a nearly 20% gain since the start of the year. Performance like this proves investing doesn't have to be complicated. There's nothing complex about investing in simple businesses that dominate their industries and return billions of dollars to their investors through dividends and buybacks. Yet it works. Keep this in mind. It might be the most profitable investing lesson you'll ever learn. Note: For more information about the rest of my Top 10 Stocks For 2014 --including several names and ticker symbols -- you can follow this link.Related articlesThe Most Hated Company On Earth... A[...]

If You Have a Burning Desire to Buy, Here's Where to Look


This is the Dow Jones Industrial Average over the last 40 years. (Photo credit: The_Smiths)Momentum is strongest in small-cap and mid-cap tech stocks, while some blue chips offer bargainsBy Sam Collins, InvestorPlace Chief Technical AnalystNew York, Sep.25, stock tips .- Blue-chip stocks took a hit for the fourth consecutive session as worries loomed over a possible government shutdown.Banks were hit hard with JPMorgan Chase (JPM) falling to a four-month low after offering to pay $3 billion to the U.S. government to settle various claims. The Dow, S&P 500 and NYSE Composite all sold off during the last two hours of trading, but small-cap and mid-cap stocks held onto their early gains.Consumer confidence for September declined to 79.7 from 81.8 in August, versus expectations of 79.8. Home prices for July rose 12.4% from year-earlier levels and were in line with expectations.At Tuesday’s close, the Dow Jones Industrial Average was off 67 points to 15,335, the S&P 500 fell 4 points to 1,697, and the Nasdaq rose 3 points at 3,768. The NYSE traded 673 million shares and the Nasdaq crossed 422 million. Advancers led decliners on both exchanges by about 1.3-to-1. Click to EnlargeThe Dow industrials have turned away from the high of 15,710 made only four sessions ago, and have penetrated into the broad support zone of 14,760 to 15,400. Within that zone is its next meaningful support, the 50-day moving average at 15,310. Click to EnlargeThe blue chips held for most of the day, but in roughly the final hour and a half of trading, the Dow plunged over 100 points, led by the financials. The bias is against the blue chips and in favor of small-cap and mid-cap stocks. Click to EnlargeThe Nasdaq’s bull channel is much like the Russell 2000′s channel illustrated on Monday. Trading is clustered close to the top of its range, and so, with MACD overbought, the Nasdaq could pull back to its 50-day moving average at 3,657.Conclusion: If you must own stocks or are a trader, grabbing the small-cap and mid-cap technology stocks appears to be the best near-term strategy since that is where the buying is concentrated and momentum is strongest.Even the broad-based S&P 500 closed below 1,705, a near-term inflection point. Its next support is its 50-day moving average at 1,679. But volume was high on last week’s advance and has declined on the blue chips’ pullback. The bright side of the blue chips’ near-term weakness is that some big, profitable names can be bought at reasonable prices like my Top 6 Stocks to Buy for October...Related articlesOnly Part of This Market Appears to Be Out of Gas ( Indexes: Midday Snapshot ( 1: Investment Basics | Blog 1-2: Stocks and Other Investments by David S. Krause ([...]

Only Part of This Market Appears to Be Out of Gas


Image via CrunchBaseSmall-cap and mid-cap stocks are leading the market, while the large-cap indices sagBy Sam Collins, InvestorPlace Chief Technical AnalystNew York, Sept.24, stock picks .- Stocks fell Monday, but the selling was primarily focused on the Dow Jones Industrial Average, which lost 0.5%. Some industrials, most utility stocks and technology issues, rallied, but financials took a hit.Apple (AAPL) rose 5% following news of demand for its latest products, and BlackBerry (BBRY) rose more than 1% after a tentative agreement to be bought out by Toronto-based Fairfax Financial at $9 a share.At Monday’s close, the Dow Jones Industrial Average fell 50 points to 15,401, the S&P 500 was down 8 points at 1,702, and the Nasdaq lost 9 points at 3,765. The NYSE traded 690 million shares and the Nasdaq crossed 427 million. Decliners beat out advancers on both major exchanges by about 1.3-to-1. Click to EnlargeAfter blasting to a new high on Wednesday, the Dow industrials have sagged and closed Monday almost on the first line of support, the upper band of a wide range from 14,785 to 15,400. Within the band is the important 50-day moving average at 15,304. MACD is turning down, as is momentum and RSI (not shown). Click to EnlargeBut while the Dow looks tired and due for a rest, the Nasdaq has barely felt the pressure of the profit-taking that has hit the Dow. The Nasdaq closed Monday just below its bullish resistance line at around 3,800, and is nicely above its bullish support line and 50-day moving average at 3,653. MACD is bullish.Conclusion: Again, the small-cap and mid-cap stocks are leading the market. But the indices that traditionally ignite markets to major bullish explosions, the S&P 500 and Dow, have low momentum readings, even appearing to be “out of gas” (see Monday’s chart of the S&P 500). And a close below the S&P 500′s 1,680 to 1,690 zone would be a negative jolt for the entire stock market.But the Nasdaq and Russell 2000 are technically sound, and so the broad market will probably continue in the upper ranges of the support zones of each of these indices until late in October. A traditional Halloween treat may be the event that leads to another leg up....Related articlesHow the Dow Jones industrial average fared Monday ( the Dow Did on Monday ( Jones Industrial Average and S&P 500: Investors Need To Be Cautious ([...]

Remain Fully Invested Until This Happens


Dow Corning Chairman, President and CEO Stephanie A. Burns (Photo credit: Saginaw Future Inc.)The long-term monthly chart of the S&P 500 confirms that a bull market is still in forceBy Sam Collins, InvestorPlace Chief Technical Analyst New York, Sep.3, stock market trading .- On Friday, the Dow Jones Industrial Average fell slightly as the possibility of a U.S.-led attack on Syria increased. And so, with the last trading day of August down, the single most-watched stock index in the world fell 4.4% for the month — its worst performance of the year.Geopolitical tensions popped oil prices to over $107 a barrel, raising the possibility of higher prices at the pump. The impact of higher gasoline prices sent the Dow Jones Transportation Average down 1.1%. Second-quarter GDP growth was revised up to 2.5%, which is a positive. But slower homes sales, earnings misses in the retail sector, and the threat of the Fed cutting its purchase of bonds in September kept investors on the sidelines in anticipation of the long holiday weekend.At Friday’s close, the Dow Jones Industrial Average was down 31 points to 14,810, the S&P 500 fell 5 points to 1,633, and the Nasdaq lost 30 points at 3,590. The NYSE traded 768 million shares and the Nasdaq crossed 383 million. Decliners led advancers by over 2-to-1 on the Big Board and by 3-to-1 on the Nasdaq.For the week, the Dow was off 1.3%, the S&P 500 fell 1.8%, and the Nasdaq declined 1.9%. Click to EnlargeThe long-term monthly chart of the S&P 500 confirms that a bull market is still in force. And as long as the black monthly line fails to drop through the red moving average line, long-term investors should remain fully invested. However, the S&P 500 is 11.5% above the 17-month moving average, and prior market tops were made at 8.1% in August 2000 and 8.4% in October 2007. Thus, a caution flag is flying for the near and intermediate trends. Currently, the near-term trend is down and the intermediate-term is in doubt. Click to EnlargeThe recent decline from the Aug. 2 high has resulted in a correction of over 4.5% in just a month. Now, with the market oversold, both MACD and our internal indicator, the Collins-Bollinger Reversal (CBR), predict a mild rally. Resistance to a near-term rally begins at the 50-day moving average at 1,660. Click to EnlargeUnlike the S&P 500, the Russell 2000 has broken an important support line — the upper line of the support band at 980 to 1,013. It has plummeted over 5% from its high made on Aug. 5. It is much more volatile than the S&P 500, so it could rally through both its 50-day and 20-day moving averages up to the resistance line at 1,044. Click to EnlargeThe weekly chart of the Dow Jones Utility Average indicates that following a spike in late April, and a subsequent correction, this index is now in a buy zone. As long as the index is above its major weekly bull market trendline (red dotted line), but under its 200-day moving average (solid red line), utility stocks should be accumulated for yield and growth. Note that it has often traded below its 200-day moving average, but just once in the last three years pierced the bull market trendline. But even on that occasion in 2011, the index quickly reversed, and within a short time resumed its upward move.Conclusion: Technical analysis is based upon the principle that humans will, under similar circumstances, react to the buying and selling of stocks much as they did in the past. So technical analysis is the study of the market itself and the reactions of literally millions of people, charting in graph form the price changes, volume, etc., and then deducing probable future trends.Thus, the input that forms the chart is all-inclusive. By that I mean that it includes the reaction of buyers and sellers to every conceivable factor that can have an impact on a stock or index. In the longer term (months and years), it has proven to be extremely accur[...]

Approach This Market With a Rifle, Not a Shotgun


English: source: my own photo. (Photo credit: Wikipedia)In a highly charged, low-volume environment, it's better to take aim at specific stocksBy Sam Collins, InvestorPlace Chief Technical Analyst New York, Aug.27, stock investment .- The stock market was slammed in the final hour of trading on Monday following a statement from Secretary of State John Kerry that President Obama may be considering military action against Syria for the recent use of chemical weapons on civilians.Low volume contributed to the volatility, and the late selling was attributed to short sales and protective strategies in advance of the possibility of an even broader sell-off. At Monday’s close, the Dow Jones Industrial Average was off 64 points to 14,946, the S&P 500 fell 7 points to 1,657, and the Nasdaq broke even at 3,658. The NYSE traded 546 million shares and the Nasdaq crossed just 336 million. Decliners led advancers on both exchanges by about 1.3-to-1. Click to EnlargeThe S&P 500 was holding its own, above its 50-day moving average, until the last hour when the sell-off hit almost all sectors. The selling also sent MACD slightly lower, cancelling the small upturn in its fast line noted last week. The index now has clearly defined resistance lines that must be overcome if it is to move ahead in October. First, it must decisively overcome its 50-day moving average, now at 1,660, and then the resistance line at 1,676, which was its breakdown point on Aug. 15. Click to EnlargeSmall caps advanced slightly Monday but were victims of the volatility associated with the collision of low volume and negative headline news.The current resistance for the Russell 2000 is at the confluence of its breakdown line and 20-day moving average at 1,042. Like the S&P 500, the Russell’s MACD has turned flat — not a bullish indication. Conclusion: This week, the major indices may be just too difficult to trade since the low volume associated with the “dog days of summer” at the top of a major market advance can lead to extremely high volatility. But that doesn’t mean that tradable opportunities don’t exist. Rather than swinging at the difficult-to-predict indices, it might be more profitable to concentrate on specific stocks like our Trade of the Day, 3D Systems (DDD), or Microsoft (MSFT). If you are bearish, short stocks in the homebuilding sector like Lennar (LEN). Using a “rifle approach” to trading can be more profitable than the “shotgun approach” in a highly charged, low-volume environment....Related articlesThe Bear Market Isn't Here Yet, But... ('t Get Too Excited About the Market's Gains ( Do You See in This Chart? ([...]

How to Spark a Fear Rally


Bull and bear in front of the Frankfurt Stock Exchange (Photo credit: Wikipedia)By Rude Awakening Baltimore, Aug.27, stock investing .- The sky is falling. Investors are panicking. But the market? The S&P is down about 2.5% from its August 2nd peak. What you're witnessing right now is the perfect recipe for a fear rally. I briefly mentioned Friday morning that investors pulled a net $9.4 billion out of U.S. stock funds last week. It's obvious the herd is terrified. Even the sentiment polls have sharply reversed from bullish to downright bearish… "Turning to what caught my eye this week, sentiment polls showed some amazing spikes in fear on a less-than-5% pullback. As contrarians, this is exactly what you want to see," opines Ryan Detrick, Schaeffer's senior technical analyst. "It doesn't mean the market has to bottom here and now, but it increases the odds of a lasting rally once we get moving again." Case in point: the American Association of Individual Investors poll. Detrick notes the bears (the poll now has them at 52%) have advanced for six consecutive weeks. That hasn't happened since the AAII poll first started 26 years ago... Adding to the slipping sentiment numbers is hard evidence proving many investors want nothing more to do with this market. Turning back to fund outflows, you can clearly see investors have abruptly turned on this year's bull market. That's no mistake. We really did just witness the largest outflows from equity funds in more than five years. This fact is even more incredible when you realize that just two summers ago, eurozone fears helped crater the markets nearly 20%-- yet this month's small dip has triggered far more selling… Fund outflows and newly bearish sentiment are setting us up for a bounce. While I still don't like the weakness we're seeing in the Dow, popular momentum stocks have held up well during this market pause. If these names continue to move toward new breakouts, you can expect the overall market's performance to improve as well over the next couple of weeks. Fight any urge to "trade scared" this week. Set your brain to buy-the-dip mode while most investors are running from the market… . Related articlesHow to Spark a Fear Rally ( the Week Ahead: Will Fear Beget More Fear? ( Is Bearish, Which Is Bullish... ([...]

Get Ready for the Annual Retail Rebound


English: simulated Wal-Mart logo (Photo credit: Wikipedia)By Wealthy RetirementNew York, Aug.27, stock advice .- You may have come across this headline from a mainstream media outlet last Wednesday: "Staples Plunges in One of Its Worst Sessions Ever" The article pointed out how Wednesday's single-day plunge of 15% was one of the worst single-day losses Staples (Nasdaq: SPLS) has ever suffered... Second only to... drumroll, please... Aug. 15, 2012, when it fell 14.6%. What struck me as odd (and bordering on lazy) was that the writer of this article - as well as the doomsaying commenters on the same article - failed to connect the dots. Think about it. The same company suffered near-15% one-day drops a year apart, almost to the day. Instead, the writer wasted readers' time lamenting that retailers are reporting lackluster second quarter results as the consumer remains cautious. Yawn... What I'm about to show you is that these two significant one-day drops (which both just so happened to occur on the day of the company's second quarter earnings release) are no coincidence. And once you understand what's happening, you can greatly improve your investing results - while substantially cutting your risk. Here's what I mean... Do You See a Pattern? I'm just tossing this out there: Maybe Staples' second quarter results are consistently terrible. Maybe, you shouldn't buy Staples shares before its second quarter earnings release... Let's take a look at Staples' quarterly revenue results: View larger image What should be jumping out at you is that the second quarter for Staples is consistently its worst quarter... The only year it wasn't was in 2009, when the first quarter was the bottom. We also see that the third and fourth quarters are consistently its strongest of the year. That means the guy who wrote "Staples Plunges in One of Its Worst Sessions Ever" had the opportunity to tell investors that this is a frequent occurrence for the quarter... But he didn't. Who's Buying in Summer? No One... Now, let's look at the entire retail sector as a whole. There are plenty of headlines speculating on doom-and-gloom for the industry as second quarter results were largely lackluster. In the following chart you'll see my Prime System Retail Index, which I use in Emerging Trends Trader. This index is made up of 21 companies. These include teen apparel retailers, big-box discount stores - such as Target (NYSE: TGT), Wal-Mart (NYSE: WMT) and Costco (Nasdaq: COST) - as well as mall-based chains and retail advertisers. Here is how the Prime System Retail Index has performed from May to October since 2000 to today: View larger image That's a lot of red isn't it? In 14 years, there have been only five years of gains from May to October - during which the retail industry reports second quarter results. And 2003 and 2009 - the best years during this mid-year stretch - were both rebound years after market collapses. So, you have to ask yourself: Is this year any different? Are shares of retailers acting outside of this normal seasonal pattern? Currently, the Prime System Retail Index is down 3.99% since the start of May. The average return for this index from May to October over the last 14 years is -3.73%. On average, eight companies in the Prime System Index will see a positive gain during the stretch from May to October... And right now, there are exactly eight companies in the green. Both figures are in line with the long-term average of the Prime System Retail Index. That means what's unfolding right now is nothing that's out of character for the sector... In fact, this is exactly what we want. Hello Holidays! Obviously, the stock market is about buying low and selling high. There's a pretty good chance if you're buying retail stocks in late spring, or before the second quarter earnings season, you're buy[...]

YouTube Boob Tube for the Taper Solution


Kicking Television (Photo credit: dhammza)By Daily Reckoning Washington, Aug.27, online stock trading .- There are big bucks on the boob tube. When I was a kid, one of my mother's most common chastisements was to turn off the TV and go do something else. In her mind, anything was better than sitting relentlessly in front of the boob tube watching inane programs. Well, it seems Ma was wrong. Not only did my retinas not burn out from staring at the TV, but I've managed to make over 128% so far this year by simply keeping an eye on it. I'd like to highlight some television companies that may be worthy of your investment dollars--especially if you're looking for a play that won't be affected by the Fed's taper talk. Because despite what you may have heard, television is far from dead. On any given day, some 2.2 trillion hours of television are being watched across the United States, according to Nielsen. More surprisingly, people watch television over 4.6 times longer than they surf the Web, according to recent data from New Media TrendWatch. So it boggles my mind that so many stock-picking gurus have been touting Web companies with questionable revenue streams. Consider Facebook, which has barely made it back to its IPO price. In fact, more than 54% of the Web company stocks tracked by the Dow Jones Internet index have lost money or trailed the S&P 500. Meanwhile, we've been quietly racking up gains with what's really making money in the modern media age. Simply put, it pays to advertise. Almost all media live and die by advertising revenue. And advertisers have a very good reason to continue throwing their money at television stations -- nothing else can match their scope. Television has the reach of nearly 89% of the total U.S. population. Radio offers only a scant 58.8% reach. Newspapers fall to a mere 36.1% of the nation. (No wonder The New York Times and Washington Post both dumped newspaper assets.) The only thing that comes close to matching television's reach is the Internet -- currently hitting 73.1% of the population. Good, but nowhere near the total reach of television. And advertisers know that not only do they reach more folks through television, but also they get more action. Advertising industry studies show that nearly 40% of consumers first learn of brands that they buy from TV ads, compared with only 8.7% from Internet ads. Furthermore, 37.2% of people cite television ads when making purchasing decisions, against a paltry 5.6% who cite Internet ads. This all points to the obvious -- that television controls the vast majority of ad spending. It now makes up 54% of all U.S. ad spending… up from 52% just a few years ago. But there's even more good news on the television ad market. Local television websites continue to draw in new viewers, and ad dollars have followed. Local online advertising revenues nationwide are up over 175.19% over the past five years -- 1.3 times higher than the overall growth of Internet advertising spending. Of course, audiences aren't the only thing about television that's growing. Televisions themselves have gotten huge. Decades ago, a 25-inch screen was a big deal. Today, you'll find screens reaching 40, 50, 60 and 80 inches… and even bigger. (Most of them built with technology from another favorite company of mine, Samsung Electronics. But that's a story for another issue.) But the same concept of bigger is better is what's happening for television station companies as well. They're expanding into markets around their home regions and nationwide. There are some key reasons for this. First, as noted above, television dominates media attention and spending. So the more stations you own, the better. [...]

The Bear Market Isn’t Here Yet, But…


New York Stock Exchange (Photo credit: Mike_fleming)Resistance will prove tough to overcome and risk is incredibly highBy Sam Collins, InvestorPlace Chief Technical Analyst New York Aug.22, national stock exchange .- “Uncertainty” was the word most often heard Wednesday following the release of the minutes of the Federal Reserve’s policy meeting in July. “Tapering,” the gradual cutting of the Fed’s bond purchase plan, will probably begin in September, according to the interpretation of the minutes.Bonds fell in reaction to the notes, as did stocks, mainly because the injection of cash into the financial system appears to have had only a small impact on jobs growth.The report said, “Nonetheless, the unemployment rate remained elevated, and the continuing low readings on the participation rate and the employment-to-population ratio, together with a high incidence of workers being employed part time for economic reasons, were generally seen as indicating that overall labor market conditions remained weak.”At Wednesday’s close, the Dow Jones Industrial Average was off 105 points at 14,898, the S&P 500 fell 10 points to 1,643, and the Nasdaq lost 14 points at 3,600. The NYSE traded 657 million shares and the Nasdaq crossed 359 million. Decliners outpaced advancers on the NYSE by 2.8- to-1 and on the Nasdaq by 2.1-to-1. Click to EnlargeThe New York Stock Exchange Composite Index contains generally higher-quality stocks. But like the other higher-quality indices, the Dow 30 and the S&P 500, it too has failed to find support at the crucial 50-day moving average mark. Its next support is at the intermediate support line at around 9,200. MACD is on a sell signal. Click to EnlargeThe Dow Jones Industrial Average broke its 50-day moving average, as well as its intermediate support line five sessions ago. Wednesday’s late sell-off puts the index in line for a serious attack on the support line at 14,845, its breakout point in August. A failure to hold that line would put the 200-day moving average in its sight — and threaten the long-term bull market.Conclusion: Technically, the better-quality stocks are facing a battery of resistance that should stymie short-term rallies. When each support line is broken, that line then becomes a resistance line — a place which has proven to be where sellers lurk. In addition, the overall configuration of the Dow is taking on the form of a broad topping process that would be complete with a close under 14,845.In his recent Street Smart Report, Sy Harding referred to another excellent technician, Mark Hulbert, who sees three signs of a market top:First, the S&P 500 is up 23% in the last 12 months. Most bull markets top at over 21%.Next, one of the most striking patterns about the month leading to a top is that the “riskiest stocks far outperform conservative ones.” We’ve discussed that at length in this column.Finally, he mentions Warren Buffett’s favorite measure of market valuation — market capitalization versus GDP. In July, it reached 118%. The last times it went over 100% were in 1999 and 2007.I, like Sy, don’t believe that we are beginning a bear market, although as he puts it, “But the risk is as high as in 2000 and 2007.” Ouch!...Related articlesDeath Blow Dealt to the Bulls? ('t Get Too Excited About the Market's Gains ( Bear Market Isn't Here Yet, But... ([...]

Global selling pressure


By Colin TwiggsSydney, Aug.22, investment opportunities .- The S&P 500 Index broke medium-term support at 1650 and is headed for a test of the rising trendline. Respect would indicate the primary up-trend is intact, but bearish divergence on 13-week Twiggs Money Flow warns of selling pressure. This is also evidenced by the marginal new high in August. A test of primary support at 1560 is likely. Breach would offer a target of 1400*.* Target calculation: 1550 - ( 1700 - 1550 ) = 1400Dow Jones Europe Index also displays marginal new highs in May and August. Penetration of the rising trendline indicates the up-trend is losing momentum — also indicated by bearish divergence on 13-week Twiggs Momentum. Reversal below support at 290 would strengthen the warning, but only failure of support at 270 would signal a trend reversal.China's Shanghai Composite Index ran into strong resistance at 2100. Declining 13-week Twiggs Money Flow (below zero) warns of selling pressure. Reversal below 2050 would indicate another test of primary support at 1950, suggesting a decline to 1800*. Breakout above 2200 and the descending trendline is unlikely, but would signal that a bottom has formed.Japan's Nikkei 225 broke medium-term support at 13500. Follow-through below 13250 would indicate a correction to primary support at 12500. Penetration of the rising trendline suggests that the primary up-trend is losing momentum. Earlier bearish divergence on 13-week Twiggs Money Flow also warns of a reversal. Recovery above the declining trendline is less likely, but would indicate the correction has ended.India's Sensex broke primary support at 18500, following through below 18000 to remove any doubt. The primary trend has reversed after a triple top and now offers a target of 16500*. Declining 13-week Twiggs Money Flow confirms selling pressure. Recovery above 18500 is unlikely, but would warn of a bear trap.* Target calculation: 18500 - ( 20500 - 18500 ) = 16500The ASX 200 is consolidating in a broadening top around the 2010/2011 high of 5000. Correction to 4900 would be quite acceptable, garnering support for an advance to the upper border, but breach of 4900 would indicate a failed swing, warning of reversal to a primary down-trend. Failure of primary support at 4650 would confirm. Bearish divergence on 13-week Twiggs Money Flow indicates selling pressure; strengthened if the indicator reverses below zero. Respect of support at 5000 is less likely, despite the long tail on today's candle, but would offer a target of 5300*.* Target calculation: 5150 + ( 5150 - 5000 ) = 5300 ...Related articlesS&P 500 healthy up-trend ( 500 follows through, gold falls ( 500 support ([...]

3 Reasons to Ditch Your Bear Suit


Bull and bear in front of the Frankfurt Stock Exchange (Photo credit: Wikipedia)By Rude AwakeningBaltimore, Aug.21, free portfolios .- Don't give up on stocks just yet. In this market, the early bear gets squeezed. It's just plain dangerous to bet against a low-volume drop like we're seeing right now. Heck, we're not even officially experiencing a correction. Or a meaningful dip. But that hasn't stopped the crash brigade from declaring once again that this is the beginning of the end for stocks… "Suddenly, everyone is talking about this being a correction. I would say that at the current moment, we are just barely in a dip but possibly headed toward a correction," says Josh Brown of The Reformed Broker. "With a market pause that is not yet even a 5% dip - let alone a 10%+ correction - people (myself included) have been jumping the gun in trotting out the C-word so early." He's not alone. These low-volume drops have investors running in circles. There are no bulls in sight. Everyone is expecting the worst… I'm not saying you should completely ignore this month's market action. But there's no reason to sell everything and set yourself on fire out on the front lawn… Here are three reasons you shouldn't jump headfirst into the bear market camp just yet: 1. It's August Trading volume is almost non-existent right now. And for the past several years, we've seen quite a few wild price swings in August that didn't stick. It's entirely possible that buyers kick it back into gear after Labor Day… 2. The Taper is coming? Every dip in this market since the November 2012 bottom has coincided with a big policy fear. First it was the Fiscal Cliff. Then it was Sequestration. Now it's the Taper. The safe bet so far is that none of it really matters as much as people think it does. 3. Hysteria Investors should welcome a dip. Dips are opportunity. But that's not the vibe I'm getting as the market creeps lower this month. Bespoke Investment Group reports that bullish sentiment among newsletter writers has declined to its lowest levels since late June. This piece of data is usually a great contrarian indicator. Also, don't ignore pockets of strength in this market. While the Dow coughed up its gains yesterday and closed in the red, the Russell 2000 finished the trading day up more than 1.5%. It's never a good idea to trade on your fears. Keep a level head and let price guide your decisions. The dog days of summer are almost behind us….Related articles3 Reasons to Ditch Your Bear Suit ('t Get Too Excited About the Market's Gains ( Heading Into 'Corrective Mode' ([...]

The Timeless Wisdom of Izzy Stone


Stones (Photo credit: rkramer62)By Daily Reckoning Chicago, Aug.22, free stock tips .- "I sought in political reporting what Galsworthy in another context had called 'the significant trifle' -- the bit of dialogue, the overlooked fact, the buried observation which illuminated the realities of the situation." -- I.F. Stone, The Haunted Fifties (1963) I start with a hidden problem in the stock market's latest earnings report card. Overall, earnings rose about 2% for the quarter. But if you take out the financials (banks, insurers), earnings actually fell by 3%. That's a problem. I appeared on Fox TV Friday morning. Before the show, I said I wanted to talk about this earnings stuff. The producer asked, "Do you think that's too technical to explain?" "I should hope not" I thought to myself. I hope people understand that earnings (or profits) drive the stock market over the long term. Specifically, the market rises and falls based on what the consensus guess is about where earnings are going. The market looks ahead. So you can match up the S&P 500 -- a broad proxy for the market -- with the consensus guess for earnings in the coming 12 months (the so-called "forward estimate"). Take a look at this chart from FactSet, which shows just that. So if earnings fall -- or if people start to think earnings will fall -- the stock market also tends to fall. This is simple stuff. Trying to predict what will happen is, of course, anything but simple. I'd say it's foolish to even try. But people love this kind of thing -- especially TV people. I was on Fox last week, on Aug. 7. I expressed the usual caution about the market, which I've been doing in these pages all year. Asked if it was time to sell, I said "Absolutely." I told viewers that my C&C portfolio was down to just nine names. We have historically carried 20-25. Anecdotally, I said, that tells you what I think of the market. It was a lucky call, because the market has done nothing but drift lower since. (It got me a return invite. They want to know what I think now.) People are starting to worry about earnings. They are also worried about when the Fed will stop pouring free drinks and end the party -- which, in a roundabout way, still comes down to a worry over earnings. The earnings for the second quarter seem to foreshadow a decline ahead. I've already pointed out the fact that if you exclude the banks, earnings actually fell. In some sectors, the decline was ferocious. The mining sector's profits were off 59%. (Fortunately, we put ourselves in a great position here. We long ago dumped all of our miners and commodity plays. Instead, we bought the financials. Today, we enjoy the profits -- and savings -- of that decision.) The overall growth in earnings was the third-slowest growth rate in the past four years (or 16 quarters). Also, the number of positive surprises was the lowest since 2008. And of the number of companies that gave guidance for the third quarter, about 80% have issued negative guidance. Meaning they've taken their forecasts down a notch or two. As a result, the expected earnings growth rate for the third quarter is 4.3%, down from 6.7% at the start of the quarter. That figure is still probably optimistic. In summary, for anyone who takes a deeper look into the market's working engine (those earnings), there are plenty of worn-out parts that look like trouble down the road.Taking a deeper look is what Izzy Stone was all about. I.F. Stone (1907-89), or "Izzy" as he was known, wrote and self-published a newsletter called I.F. Stone's Weekly for nearly two decades. It was influen[...]

Great Company, Unstable Dividend


An assortment of United States coins, including quarters, dimes, nickels and pennies. (Photo credit: Wikipedia)By Wealthy RetirementNew York, Aug.22, free stocks .- Blackstone Group L.P. (NYSE: BX) is one of the world's largest and most successful investors. It runs a diverse group of funds that invest in a wide variety of assets including stocks, real estate, private equity, etc. Blackstone has nearly a quarter of a trillion dollars under management. The company makes a lot of money. In the first six months of the year, its profit was $938 million. That's up significantly from $512 million the year before. And Blackstone pays a decent dividend. In the first six months of the year, it has paid $0.53 per share. Annualized, that comes out to a healthy 4.9% yield. However, the dividend fluctuates strongly from quarter to quarter and year to year. In the first quarter, the distribution was $0.30. The second quarter distribution fell to $0.23. So for an investor who needs a reliable income stream, Blackstone doesn't deliver. You can see from the chart below, the company's dividend history has been all over the place. It lowered the dividend in 2009 and 2010. Raised it slightly in 2011, cut it in 2012 and now will grow the dividend in 2013. View larger imageIn the first six months of the year, the company's distributable earnings (a measure of cash flow) was $729 million. During that time, it paid out $905 million in distributions. Last year at this time it also had paid out more in distributions than it earned. The company has a policy in place that the dividend will be at least $0.12 per share, even if it has to "borrow" money from future quarters to pay for it. Fortunately for shareholders, the company hasn't needed to do that yet, but it is possible it will in the future if business takes a bad turn. When I discuss the safety of a dividend in these Safety Net columns, my main goal is to try to figure out if the dividend will be cut in the not-too-distant future. Although I always prefer dividend growth, a stable dividend will still merit a high rating. Unfortunately for Blackstone shareholders, the dividend is anything but stable. That doesn't mean it will get cut to zero. Blackstone is a very well-run company that makes lots of money. But it has no track record whatsoever to speak of when it comes to a stable dividend. Some years it goes up. Others it comes down by a significant amount. Blackstone may be a suitable investment for those who are looking for growth (I haven't analyzed the stock for its growth prospects) and who will be happy with whatever income they happen to get. Other investors who see that 4.9% yield and are willing to take their chances that the dividend doesn't get reduced too much in the future could wind up happy too. I'm not saying they will, just that it's a possibility. But since this column is all about safety, I have to warn investors who need a reliable quarterly dividend check that Blackstone is NOT for you. Its dividend is just way too unpredictable. You never know what you're going to get in any given year. Dividend Safety Rating: F If you'd like me to review the dividend safety of one of your stocks, leave the ticker symbol in the comments section below. But before you do, check to see if I've written about it already. Enter the ticker symbol or name of the company in the search box in the upper right corner of the website. Related articlesF.N.B. Declares Fresh Dividend ( Higher Interest Rates Doom Utilities? ( Heavily Shorted Dividend Stocks to Sell ([...]

52 Members Of Congress Own This High-Yield Stock -- Should You?


United States Capitol Building (Photo credit: Jack's LOST FILM)By Street AuthorityWashington, Aug.22, hot stock picks .- It's the most popular high-yield stock owned by Congress. And they might be on to something. Right now this stock yields 5.3%… and it's one of the most stable dividend-payers in America. During the recession, dividends stayed steady. And in the past five years investors have enjoyed five annual dividend increases.At last count, 52 members of Congress -- 19 Democrats and 33 Republicans -- owned shares of this company.I'll tell you more about the stock in a moment. But first, I think you should understand why it's important to know that Congress owns the stock at all...A few years back, "60 Minutes" finally blew the lid off the entire thing.To make a long story short, insider trading was legal for members of Congress and many of their high-ranking aides for years. They could trade based on the information they encountered in their day-to-day work, even it if it was non-public information.We had been telling readers about this for months before Congress finally changed the rules. In fact, we even put out a special report -- Congress' Dirty Secret -- that outlined the problem and also showed people how to find out what their Congressman owned with a few clicks of a mouse.But there's no illusion here. We could scream about the problem until we're blue in the face. However, when "60 Minutes" -- one of the most-respected investigative journalism programs on television -- dedicates a segment to the issue, the nation pays attention.And we were happy to see all that attention lead to a change with the passage of the STOCK Act. There's no doubt that this was a problem. According to data from the Center for Responsive Politics, 247 of the 535 members of Congress are millionaires. That's 48%! In other words, being a millionaire makes you "average" in Congress.Meanwhile, according to a Barron's story, members of Congress outperform your typical investor by an extra 6.8 percentage points each year.Knowing all that, you would think looking at the most popular stocks in Congress would shed light on some super secret investing strategy that would produce better returns than everyone else. After all, they could make trades based on insider information.But according to Factset, a research firm specializing in money in politics, the most popular dividend stock owned by Congress is one of the best known companies in the world. And though the rules have changed to disallow Congress from making investments from insider information, the most recent data available is from 2011, before the STOCK Act passed.And let me be clear. We're not suggesting that Congress had inside information on AT&T (NYSE: T) -- the high-yielding stock that's owned by more than 50 members of Congress (that makes it the most popular income stock owned by our representatives).However, when dozens of millionaires with a history of beating average investors year after year own a particular stock, we think it's smart to pay attention.Obviously, AT&T won't make you a millionaire overnight, but it is one of the most stable businesses in America. The shares fell with the broader market during the recession, but the underlying business kept steadily making money.Today the company takes in about $127 billion in revenue each year and has about $4.5 billion in cashsitting in the bank. AT&T returns roughly $10 billion annually to investors in the form of dividends. And those payments have increased every year going all the way back to the 1980s.I'm not necessarily recommending you snap up some shares of AT&T, but there is plenty to like about the[...]

Fed Tapering: Misunderstood


English: Detail from Government. Mural by Elihu Vedder. Lobby to Main Reading Room, Library of Congress Thomas Jefferson Building, Washington, D.C.  (Photo credit: Wikipedia)By Logic Fund ManagementNew York, Aug.22, hot stocks .- Today, we got a look at what the Fed was discussing at their July 31 FOMC meeting. Again, it was another highly anticipated event for global markets. Despite the lack of any material new news in recent weeks, the word taper has continued to dominate the headlines. But I’m not sure why people are so fearful of the possibility that the Fed could scale down its third round of QE. Now, I could do a deep-dive into today's Fed minutes for you, but admittedly, all of this hyper-analysis of the nuances and details of a Fed tapering is a bit ridiculous. What is being lost on everyone is what the Fed attempts to accomplish by its QE program. To be sure, exactly how the transmission of QE helps the economy is inexact at best -- short of the downward pressure it's put on mortgage rates, from the Fed's MBS purchases. Even the Fed's Yellen, a proponent of QE and possible next Fed Chairman, has publicly said she can't prove it works directly to produce growth and drive inflation. So what does QE do, ultimately? Here's what it does ... It gives people the confidence, in a fragile world, that the Fed is still here, doing anything and everything necessary to defend against shocks and promote some stability. With that, people don't sit on their money. They don't hoard gold, and guns, and build a bunker. They live life. They start to invest again, and spend again. Companies can plan. They can slowly begin to hire again. And that's what has happened. As I've said in the past, this "confidence manipulation" strategy is key for the Fed. They don't have the policy tools (or latitude) to restructure global trade, the major structural issue that continues to overhang the global economy. But what they can control is confidence.All of that said, the Fed appears to have realized that QE is just one of many tools that can accomplish that goal of producing confidence and stability. The ECB has shown them that making bold promises can achieve the same objective (i.e. just words). The ECB promised to keep their risky sovereign bond markets in check by threatening to buy as many shaky Spanish and Italian bonds as necessary to push rates back down to tolerable levels – enough said. They haven’t had to buy one single Spanish or Italian bond. Rates on those bonds have gone from ticking time bombs to attractive investments for global bond managers. The bottom line: Global central banks have come to the conclusion that telling people you are constantly prepared to act, ready do anything necessary – meanwhile, telling them that rates will stay at record lows for a LONG time, can do the trick. It makes the Fed wonder, why are we engaging the potential risks associated with QE, when it doesn't seem so necessary anymore? From an investor’s perspective, the most important thing to keep in mind is this: The Fed and other global central banks have committed trillions of dollars to keep the world from spiraling into depression. They've continued to act all along the way (together) to promote stability in a fragile time. The last thing the Fed would do is anything to undo global economic stability, or anything to threaten the trillions of dollars in global central bank backstops. Now, the biggest fear that has been expressed by market participants, surrounding Fed tapering of QE, has been the prospects that tapering will trigger a collapse in stocks. That's an [...]

Don't Get Too Excited About the Market's Gains


(Photo credit: Tjeerd)Lower quality stocks led the advance; near-term trend remains downBy Sam Collins, InvestorPlace Chief Technical AnalystNew York, Aug.21, free investment ideas .- The S&P 500 rose 0.38% Tuesday, breaking a four-day losing streak. But the market was led by the small-cap stocks with the Russell 2000 up 1.51% after falling for five consecutive sessions.Better earnings from the retail sector, including Best Buy (BBY),TJX Companies (TJX) and Urban Outfitters (URBN), contributed to the gains. Homebuilding stocks bounced as well, with the iShares Dow Jones US Home Construction (ITB) up 3.1% and most of the major builders up as much as 4%.At Tuesday’s close, the Dow Jones Industrial Average was off 8 points at 15,003, the S&P 500 rose 6 points to 1,652, and the Nasdaq gained 25 points at 3,614. The NYSE traded 634 million shares and the Nasdaq crossed 311 million in a light-volume session. Advancers led decliners on both major exchanges by 2.7-to-1. Click to EnlargeThe S&P 500 regained a small part of the four-day decline that began on Aug. 14 with a gap down from its 20-day moving average. But Tuesday’s bounce failed to close above the 50-day moving average, and so this senior index must be considered negative for the intermediate term.A close under the intermediate trendline at about 1,650 would confirm the downtrend while a solid advance with higher volume would turn the index positive again. Click to EnlargeThe Russell 2000 small-cap index stayed under its 50-day moving average for just one day. Note the oversold MACD and a slight hooking up from the fast line (red). The current bounce could even challenge the breakaway gap at 1,038-1,045. But the head-and-shoulders breakdown will be difficult for traders to overcome.Conclusion: These charts vividly illustrate the market’s current dilemma. As in July and part of August, the leading stocks are of lower quality, not the stuff of dynamic bull markets. In fact, on Tuesday, the blue-chip Dow 30 closed down while lower quality stocks rallied. Fed talk could support a continuation of the rally, but the die is cast and the near-term trend is down with the intermediate-term trend hanging by a slim thread. Continue to sell into strength....Related articlesBest Buy Co., Inc. (BBY), Urban Outfitters, Inc. (URBN), The TJX Companies, Inc. (TJX): Today's Three Best Stocks ('t Get Too Excited About the Market's Gains ( the Close: Stocks End Mixed Ahead of Fed Minutes, Homebuilders Rebound, Medtronic Falls ([...]

This Left-For-Dead Stock Could Jump 50%-100% In 12 Months


Image via CrunchBaseBy StreetAuthorityNew York, Aug.21, daily stocks .- What struck me most about my first trip to Europe was the popularity of mobile phones. It seemed everyone had one and was talking or texting while walking down the street. I look back on this experience as a glimpse into the future.Just a few short years later, the same phenomena occurred in the United States. Today, landlines are becoming a thing of the past while even the majority of preteens own or use mobile phones. Nowhere has this growth been more dramatic than in the smartphone sector. These devices have become a ubiquitous part of our culture. Many people wouldn't even consider venturing outside without their smartphone.The rise and fall of the companies producing these addictive devices is just as fascinating as their rapid rise to become an indispensible part of most people's lives. Once-popular companies such as Palm and Nokia (NYSE: NOK) were among day traders' favorite stocks for quite some time. Those names have since fallen to competitors such as Apple (Nasdaq: AAPL) and Samsung (OTC: SSNLF). We all know the benefits of investing in the top-tier smartphone makers. However, there is a special situation arising in one left-for-dead manufacturer. I'm talking about BlackBerry (Nasdaq: BBRY) (previously known as Research in Motion).This Canadian-based company led the smartphone revolution with its line of corporate-user-focused BlackBerry smartphones. But over the past several years, the company has been left in the dust by competitors. In fact, this former high-flying company's shares were knocked down into the $6 range back in September. My purpose here is not to talk about why or how this happened, but to explore a real opportunity to profit. Flickr/Honou With a market value of more than $5 billion, along with its $3 billion in cash and no debt, Blackberry has become a prime takeover target. The Bad News In the latest quarter, BlackBerry only shipped 2.7 million BlackBerry 10 devices -- missing Wall Streetexpectations by a disappointing 22%, or 600,000 units. Not to mention, gross margin dropped dramatically the first quarter -- from 40% down to 34%. The Good News With a market value of more than $5 billion, along with its $3 billion in cash and no debt, Blackberry has become a prime takeover target. Analysts at Jeffriess have the takeout price for BlackBerry pegged at $15 per share with a target price of $18. Sparking this speculation is the fact that BlackBerry's largest shareholder, FairFax Financial CEO Prem Watsa, recently resigned from BlackBerry's board of directors due to a conflict of interest. This could mean Watsa has plans to take the company private. He has been exploring options withprivate equity firms to facilitate the buyout. BlackBerry has formed a committee to explore a potentialsale. This news sent shares surging more than 10%. Shares have rallied since August 1 on the buyout possibilities prior to hitting resistance in the $12 range. The share price has since dropped back to $10 prior to bouncing off of this support level.Most interestingly, is Timothy Dattels, who chairs the committee to explore options for the company. Dattels is also a senior partner at TPG Capital, which is a $57 billion private investment firm. In addition, a possible bidding war could break out with the value of BlackBerry's patent portfolio and enterprise assets, potentially pushing shares above $20.Risks to Consider: BlackBerry devices have fallen out of favor with many consumers. No matter how the company innovates, [...]

How to Be Richer, Thinner and Happier… Part 2


Weight Watchers Keys (Photo credit: slgckgc)By Investment UChicago, Aug.21, best stock to buy .- For most of my post-20s adult life, I was 6'3" and weighed about 220 pounds. I imagined I was about 10 pounds overweight. I was mistaken. According to a body mass index (BMI) calculation, I should weigh no more than 195 pounds. In other words, I was 25 pounds overweight. To put this in perspective, a gallon of milk weighs 8 1/2 pounds. That meant I was essentially carrying around three big milk jugs each day, a considerable strain on my heart. Incidentally, here is an easy way to calculate your ideal weight, according to Dr. Roberta Anding, a registered dietician and Director of Sports Nutrition at Baylor College of Medicine. If you are a man, take 105 pounds and add 6 pounds for every inch you are over 5 feet tall. (Depressing, I know.) If you are a woman, take 100 pounds and add 5 pounds for every inch you are over 5 feet tall. Now you have a number to shoot for. Know the Principles You might be wondering what the heck this has to do with investing. My answer is everything. As I noted yesterday, in my experience the same principles that create wealth can be used to create a leaner body. Investors and dieters who fail fall prey to the same five problems: They have a knowledge deficit. They have unrealistic expectations. They embrace all-or-nothing thinking. They fail to control their environment. They don't stick to proven principles.When I was trying to lose weight, my first mistake was thinking I already understood everything I needed to know about weight loss, despite the fact that I hadn't lost any. After all, every day you either take in more calories than you burn or you burn more calories than you take in. So I just needed to exercise more, right? Didn't work. I was (and am) an avid singles tennis player. Three or four times a week, I would play for two hours or more and leave the court feeling like a wet rag. Yet I managed to eat enough to match (or exceed) the calories I was burning. So I figured I just needed to make a few changes to my diet. I switched coke for diet coke, ordered the salad instead of the fries with my cheeseburger, and had frozen yogurt instead of ice cream for dessert. Yet my weight loss was somewhere between glacial and nonexistent. Turnaround Then, about a year and a half ago, my wife Karen invited me to join Weight Watchers with her. I was skeptical, but in looking into the company, I learned something interesting. Two years ago, U.S. News & World Report published its first-ever Best Diets rankings. A panel of 22 leading, independent science experts ranked 20 different diet programs based on seven key factors: short-term weight loss, long-term weight loss, ease of compliance, nutritional completeness, health risks, and ability to prevent or manage diabetes and heart disease. Weight Watchers finished at the top of the heap. (Full disclosure: I'm not an expert on diet and nutrition, and I'm not endorsing Weight Watchers over competing weight-loss systems. I'm only relating my personal experience here.) What I liked about Weight Watchers is that it offers a complete weight-loss system. I won't go into all the details here, but Weight Watchers doesn't tell you what you can or can't eat. Instead, it makes you accountable for everything you put in your mouth by requiring you to record what you eat and drink each day. This puts an immediate end to mindless eating. (And you can eat and drink more if you exercise more.) I had expected this to be boring at best, but I fo[...]

Avoid the Emerging Markets Storm


HK Central QRC Luk Hoi Tong Bldg n Theatre Lane Hang Seng Index (Photo credit: Wikipedia)By Rude AwakeningBaltimore, Aug.21, best stock .- The broad market just posted its first four-day losing streak of the year. But you should continue to concentrate on U.S. stocks to help fuel gains in your portfolio. Why? Because despite recent market weakness stateside, the rest of the world's performance just isn't up to snuff right now—especially emerging markets. Take a look:And the chart illustrates just a couple of examples. MarketWatch notes that today alone even the major Asian markets tumbled alongside the once-revered emerging market leaders. Japan's Nikkei dropped 2.6%, South Korea's Kospi lost 1.6% and Australia's S&P/ASX 200 gave up 0.7%, and Hong Kong's Hang Seng Index shed 2.2%... "The eye of the storm is directly above emerging markets now, two years after it hovered over Europe and four years after it hit the U.S.," Stephen Jen, co-founder of hedge fund SLJ Macro Partners LLP in London and former head of foreign-exchange strategy at Morgan Stanley told Bloomberg. "This could be serious for Asia." As a result, investors are favoring U.S. stocks over emerging markets by the most ever right now. "Almost $95 billion was poured into exchange-traded funds of American shares this year, while developing-nation ETFs saw withdrawals of $8.4 billion," Bloomberg notes. That's huge… I know this week isn't looking very promising so far (not even here in ole' USA). In fact, it's been downright crappy. Everything—and I mean everything—closed lower yesterday. Bonds, gold, and stocks. All of them fell Monday. But it's August. Trading volume is incredibly low right now. While the short-term trend for the broad market is lower, it's not yet flirting with disaster. Conditions can change quickly. We have to react—not anticipate. In the meantime, except for a select few opportunities, you should not try to bottom-pick emerging markets. It will only lead to pain and suffering for your portfolio….Related articlesAvoid the Emerging Markets Storm ( the Emerging Market Sell Off Continue? ( Stocks Decline for Fifth Day Ahead of Fed Minutes - Bloomberg ([...]

Death Blow Dealt to the Bulls?


Monday, Monday... (Photo credit: practicalowl)Monday's price action was the coup de grace for those who expected the market to break to new highs again this summerBy Sam Collins, InvestorPlace Chief Technical Analyst New York, Aug.20, trading stocks .- Much of last week’s angst over falling bond prices and fear of a Federal Reserve change from an easy money policy led to a broad market decline on Monday.There was little in the way of news on which to focus, but a new probe of banks and their foreign policies led to selling in the financial sector. Other interest rate sensitive sectors like housing, construction and utilities underperformed.At Monday’s close, the Dow Jones Industrial Average was off 71 points at 15,011, the S&P 500 fell 10 points to 1,646, and the Nasdaq lost 14 points at 3,589. The NYSE traded 640 million shares and the Nasdaq crossed 342 million. Decliners outpaced advancers on the Big Board by 4.4-to-1 and on the Nasdaq by 2.3-to-1. Click to EnlargeThe S&P 500 continued to fall Monday, and following the close, it is 64 points, or 3.7%, from its all-time time high made just 12 sessions ago. Those who were bullish at the top must be very frustrated since Monday’s clear penetration of the index’s 50-day moving average qualifies the August high as a “false breakout.”And Monday’s drop also confirmed that the near-term trend is down and the intermediate-term trend is likely to be down since the 50-day moving average is generally considered to be an inflection point.Conclusion: Monday’s price action is the coup de grace for those who expected the market to recover and break to new highs again this summer. The 20/20 nature of hindsight reveals that investors had numerous opportunities to be skeptical of the August “breakout.”Several times, I’ve mentioned the lack of breadth, an overbought McClellan oscillator, the unlikelihood that small caps would lead to a solid advance, etc.The downside targets of the recent breakdown were outlined in Friday’s Daily Market Outlook: “S&P 500 1,642, then 1,573 (June closing low); Dow 14,660 (June closing low); and Nasdaq 3,320 (June closing low) after penetrating its 50-day moving average at 3,533. In other words, look for a 3%-7% decline with the high-tech and small- and mid-cap stocks hurt the most. It is time for defensive strategies since a pullback of this extent could be followed by a period of consolidation that may last for several months.”Other technicians with high credentials, like Jeffrey Saut of Raymond James, expect a full 10% correction and look for a downside target of 1,560 to 1,530 on the S&P 500.Today, however, with many of our internal indicators oversold (McClellan oscillator, MACD, etc.), I look for a weak bounce followed by a resumption of an intermediate correction. Thus, traders should sell into rallies....Related articlesWhat Do You See in This Chart? ( Blow Dealt to the Bulls? ( Bottom May Not Come Until October ([...]

Short the Market If This Happens


Spy vs. Spy (Photo credit: tr.robinson)By StreetAuthorityNew York, Aug.20, top stocks .- By some measures, stocks just suffered their worst week in 2013. Despite that setback, the S&P 500 is less than 3.2% from its all-time high. Until prices fall further, the weight of the evidence shows stocks are still in a long-term uptrend.SPY Nears Support SPDR S&P 500 (NYSE: SPY) fell for the second week in a row, losing 2.06% last week. Other majormarket indexes were also down as traders reacted to news that was generally considered to be negative. Among the most important news stories was that a number of companies, including Cisco (Nasdaq:CSCO) and Wal-Mart (NYSE: WMT), lowered their outlook for the rest of the year.Even good news was bad news to traders last week. Retail sales exceeded expectations, and the number of initial unemployment claims fell to a six-year low.The problem with good news is that the Federal Reserve has said they will taper their buying and eventually stop purchasing $85 billion worth of long-term bonds every month when unemployment declines sufficiently. Traders are concerned that the market could fall if the Fedstops buying long-term bonds.Continued good news about the economy could be the cause of a stock market decline.For now, SPY seems to be near a level where it should find support. The chart below shows a small head-and-shoulders pattern. The "S" on the left side is the first shoulder in the pattern. This forms when prices pull back after trending higher. The "H," or head, is the new high reached after the initial pullback. The "S" on the right is the second shoulder, which forms after a rally fails to reach a new high. The pattern could be labeled differently, but the general idea is the same for any type of topping pattern.Almost all chart patterns use the idea of symmetry to find price targets. The eventual breakout is expected to be equal to the size of the pattern. In this case, the distance between the bottoms of the shoulders and the top of the head is equal to about $3.50. This value is subtracted from the breakout point and a target of $164 is drawn on the chart above.The next chart shows that a similar target can be found with another technique.After a price move, technical analysts look for a retracement. Markets never move straight up or down, and a retracement generally occurs after a significant increase or decrease in prices. At $163.35, SPY would retrace half of the move that pushed prices up from late June to early August.A break below $163 would show that we exceeded a normal pullback and more downside should then be expected.Good news for the economy will support growth in earnings, and that should push stock prices up in the longer term.I still believe that the S&P 500 will reach 2,000 in the next 6-12 months. Long-term investors should not be concerned about the recent weakness in stock prices. Short-term traders should consider adding inverse ETFs like ProShares Short S&P 500 (NYSE: SH) to their portfolio if SPY falls below $163.Gold Market Faces Less Selling Pressure SPDR Gold Shares (NYSE: GLD) gained 4.51% last week. This gain came as SEC filings showed that large hedge funds reduced their positions in GLD during the second quarter.John Paulson sold about 11.6 million shares, worth at least $1.3 billion. George Soros also sold his position in GLD, although it was much smaller than Paulson's at about 500,000 shares. These two investors were joined by a number of other [...]

How to Defeat the Hindenburg Omen


The Zeppelin LZ 129 Hindenburg catching fire on May 6, 1937 at Lakehurst Naval Air Station in New Jersey. (Photo credit: Wikipedia)By Rude Awakening Baltimore, Aug.20, swing trading .- The stock market is a fiery zeppelin crash waiting to happen. Well, maybe not. But that's what the financial media coverage of a rather complicated technical indicator would like you to believe. Everywhere I look, I'm seeing breathless mentions of something called the Hindenburg Omen. Some sources are reporting as many as 11 Hindenburg Omens have materialized just over the past few weeks. "A Google News search for the term "Hindenburg Omen" returned 6,340 results this weekend, and more than a few dramatic photos of the ill-fated Zeppelin airship," writes my trading buddy Jonas Elmerraji. "Yup, fear is the predominant emotion in stock investors right now – why else would click-hungry media outlets push some obscure market indicator named after a gruesome disaster?" On top of the perfectly-named Hindenburg Omen, we experienced a 2% drop in the broad market last week. So conditions are ripe for some new worries. But aside from its catchy (and terrifying) name, what's the deal with the Hindenburg Omen? For starters, if you've bothered to read any of the articles that cite the indicator, you've probably noticed that none of them really explain what the hell the Hindenburg Omen measures. That's because it's incredibly complicated. Fully grasping the Hindenburg Omen requires more than a rudimentary understanding of simple technical analysis techniques. I'm not even going to bother wasting my time trying to lay it all out for you. I can't even come up with a simplified explanation beyond the fact that it's bearish and it involves tallying NYSE advances plus declines and new highs vs. new lows. And that doesn't even begin to get into the nuances of what's required to trigger the indicator… If the Hindenburg Omen had a mundane name, it never would have caught on. Its track record for calling major tops isn't consistent (Hindenburg Omens made similar headlines in 2010, for example). Most people don't even know how it works. It looks good in a bearish market story. But it's not something anyone should use as a trading signal. It's no secret that the short-term trend for stocks is lower. The S&P 500 has dropped five out of the last six trading days. So far, we've seen a retreat of 3% this month. But if you're prepared for a bigger correction, the big, scary headlines won't ruin what has been a solid year for stocks so far. Maintain appropriate stop losses and sell when they're triggered. Don't force any new trades while the market is falling. And don't blindly sell out of your positions based solely on fear. Keeping a clear mind during a correction (of any magnitude) will put you eight steps ahead of every other investor on the planet. Related articlesHow to Defeat the Hindenburg Omen ( Omens: Technical Indicator Warns of Imminent Stock Market Crash ( Hindenburg Omen In 8 Days Sends Stocks Slumping ([...]

Gold Chart of The Week


By INOChicago, Aug.20, stocks to watch .- Each Week will be providing us a chart of the week as analyzed by a member of their team. We hope that you enjoy and learn from this new feature.Weekly Gold Report (August 19th through August 23rd)Market bulls were dealt a blow last week as stock traders began booking profit on long positions in expectation of a FED taper in their bond purchase program. The selling pushed the stock indexes lower throughout the week until the Dow suffered its largest weekly drop in over a year. Similarly, the US Bond Markets fell under pressure as traders continued to try to anticipate the FED’s next decision regarding Quantitative Easing and Interest Rates.While the upcoming week is short on economic data from the United States, traders will be looking forward to PMI figures from China and Germany. We will also have an opportunity to review the minutes from the last FOMC Meeting, which should provide decent market movement. Lastly, we will hear from a few FED Members later in the week as they convene for their annual Jackson Hole Symposium.I anticipate the FED speak will be nothing short of confusing, which has been par for the course over the last several months. When one member is hawkish today, another member is dovish the following day. It makes sense to perpetuate this style of reporting because if every FED member agreed on the scale and timeline of QE, the major financial markets would experience massive directional moves, and a one sided trade. And until the FED actually feels comfortable enough to raise Interest Rates, we should expect this type of reporting and inconsistent FED speak.The Precious Metals markets seemed to benefit the most from the profit taking selloff from last week. Gold was up 4.60% on the week and Silver was up significantly more. It was obvious that Hedge Funds added to their net long positions in both Precious Metals and speculators also seemed to be along for the rally. It will be interesting to see if the rally continues into this week’s Precious Metals trade. I will be watching the stock markets as my indicator for Metals. If stocks continue to feel pressure this week, I would have to assume that the profit from stocks will continue to spill over into the Metals. If the stocks begin to see some relief from last weeks drop, then I would assume Gold and Silver will consolidate and possibly retrace some of the rally from the prior week.Gold Futures in the December contract are holding between the 20day and 100day simple moving averages (arrows #1 and #2). Until we hear from the FED members later in the week, I would not be surprised to see Gold Futures continue to consolidate between $1325 and $1375. With the light volume in markets across the board, it is easier for large funds to drive markets with large lot orders, so traders should always be prepared for volatility. But I doubt we will see much until the FED minutes are released later in the week.Related articlesGold Lending Rates Drop Further On Supply Concerns ( David Franklin: Have Precious Metals Bottomed? ( ([...]