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A Look at SPY Technical Levels

Thu, 23 May 2013 14:05:12 -0400

Daily The market went from yesterday’s highs of $169.07 to this morning’s lows of $163.49. So far we’ve bounced to the 25% Fibonacci retracement of that move. Here are the Fibonacci levels to watch: 38.2% at $165.90 50% at $166.50 61.8% at $167.11 Measure the potency of the down move by using retracement levels of [...]

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Stock Options Watch: HD, IMAX, DOV

Thu, 23 May 2013 13:48:10 -0400

(NYSE:HD) - Home Depot – Shares in the home improvement retailer are trading lower on Thursday, off the lowest levels of the session but still down 1.25% at $78.69 as of 11:50 a.m. ET, amid a down day for U.S. stocks. Trading traffic in newly issued weekly options on Home Depot suggests some traders are taking [...]

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Bernanke Saves the Day

Thu, 23 May 2013 13:34:24 -0400

There was some initial consternation yesterday after Federal Reserve Chairman Ben Bernanke gave the clarity we were hoping to see. From Reuters: “If we see continued improvement and we have confidence that that’s going to be sustained then we could in the next few meetings … take a step down in our pace of purchases,” [...]

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Cost-Shifting’s Biggest Victims: Why You Can’t Afford to Be Uninsured

Thu, 23 May 2013 13:32:30 -0400

It’s come to this: A typical family’s health insurance costs as much as a typical family car. If you’re a typical American family, your “health” will set you back $20,728 every year. That figure comes gratis of Milliman, a benefits consulting group. A base-model Toyota Camry… the typical family’s most-popular make? It costs $22,055. Milliman’s [...]

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Stocks: The Trend is Up, A Pullback is Brewing

Thu, 23 May 2013 11:48:04 -0400

There’s nothing like a little mean reversion to start your day… The Japanese Nikkei fell flat on its face overnight. Investors looking for an excuse to take profits received just that in the form of soft Chinese manufacturing numbers. That’s all it took for traders to mash the “sell” button… After shooting as high as [...]

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All Eyes Should Be On Big Energy – XOM, DVN, BP, SU

Thu, 23 May 2013 10:59:23 -0400

The important energy sector accounts for roughly 16.0 percent of the S&P 500 Index. Today, most of the leading energy stocks are declining lower at the start of the session. Exxon Mobil Corp (NYSE:XOM) is the leading stock in the sector. This stock also has the largest market capitalization in the stock market at $406 [...]

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Madoff Claims Some of His Clients Were Aware of the Fraud as Far Back as 1987

Thu, 23 May 2013 10:35:24 -0400

FBN’s Adam Shapiro went behind bars with Madoff this morning at the Federal Correctional Complex in Butner, NC for a wide ranging interview, where Madoff went on the record directly accusing some of his clients of taking part in his fraud. Madoff claims business associates Stanley Chais, Norman Levy, Jeffry Picower and Carl Shapiro were [...]

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Goldman (GS) Committed to China – Blankfein

Thu, 23 May 2013 10:21:20 -0400

Goldman Sachs CEO Lloyd Blankfein sat down with Bloomberg TV anchor Erik Schatzker at the company’s annual meeting in Salt Lake City. Blankfein said that the firm is committed to growing in China even after it ended a seven-year investment in ICBC: “ICBC is not the key to our interest in China, or the big [...]

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The Challenges for Iran’s Next President

Thu, 23 May 2013 09:28:00 -0400

Iran’s Guardian Council, the powerful vetting and oversight committee of the Islamic republic, announced Tuesday its list of eight approved candidates for the June 14 Iranian presidential election. A total of 686 presidential hopefuls had submitted their names for approval, though in recent days dozens of politicians and clerics had withdrawn their candidacies in support [...]

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Stocks to Watch: AMZN, LNKD, PCLN

Thu, 23 May 2013 09:19:52 -0400

Amazon.com, Inc. (NASDAQ:AMZN) The stock chart shows a reversal day pattern on very high volumes, with the stock price closing near the lows of the day slightly above the EMA50. Stronger volumes on down days remain a concern. The technical indicators are showing signs of bearishness. The 9-day EMA has turned down and the 50-day [...]

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Top Pre-Market Stocks Upgrades/Downgrades May 23, 2013

Thu, 23 May 2013 08:56:49 -0400

UPGRADES Hewlett-Packard (NYSE:HPQ) upgraded to Hold from Underperform at Jefferies – Hewlett-Packard upgraded by Jeffries to Hold, citing solid execution and cost controls following the company’s Q2 results. The firm raised its price target for shares to $24 from $18.50 Seagate (NASDAQ:STX) upgraded to Buy from Hold at Deutsche Bank – Deutsche Bank (DB) upgraded [...]

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Stairs Up, Elevator Down Market

Thu, 23 May 2013 08:41:36 -0400

World markets reacted overnight to the major reversal in US markets yesterday and are down big this morning. Japan is getting hit the hardest, down around 7%, although it was up more than 50% for the year so far. The negative feedback loop also circled back to US futures, with the S&P e-minis down 15-18 [...]

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Excess German Savings, Not Thrift, Caused the European Crisis

Thu, 23 May 2013 08:27:36 -0400

One of the reasons that it is been so hard for a lot of analysts, even trained economists, to understand the imbalances that were at the root of the current crisis is that we too easily confuse national savings with household savings. By coincidence there was recently a very interesting debate on the subject involving several economists, [...]

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Stocks & Inflation Expectations: Diverging Paths, Many Questions

Thu, 23 May 2013 08:15:52 -0400

The US stock market and inflation expectations have been going their separate ways for the past two months, which is something new by the standard of the last five years. Is this a sign that marks a break from the past, when higher the outlook for higher inflation was generally cheered by the market? Or [...]

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Every Dividend Investor Should Know These 3 Income Stocks with 5% Yield

Thu, 23 May 2013 06:16:58 -0400

Dividend-paying stocks have never been more popular, especially among those income-oriented investors who are looking for returns that are a bit more substantial than Treasurys current disappointing yields, and are also willing to accept a slightly higher degree of risk. MarketWatch’s Laura Mandaro discusses in the accompanying video three income players with 5%+ yield. Garmin [...]

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Tweets from Warren Buffett’s Woodstock

Wed, 22 May 2013 15:25:52 -0400

Traditions. As you get older your life slowly starts turning into a series of traditions. (I write this word and I think of Tevye the milkman in Fiddler on the Roof singing it.) And over the years, the beginning of May has turned into a wonderful tradition: a trip to Omaha to Buffett’s Berkshire Hathaway annual meeting. [...]

Special Prosecutors: Be Careful What You Wish For

Wed, 22 May 2013 15:25:42 -0400

There have been various calls in recent days for the appointment of an independent counsel to explore and expunge the IRS’s selective investigation of conservative groups seeking tax-exempt status after 2009. From the right, Peggy Noonan in the Wall Street Journal claims, for instance,that “we are in the midst of the worst Washington scandal since [...]

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Stock Market: A Day to Take Notice?

Wed, 22 May 2013 15:14:55 -0400

I’ve attached two charts: the daily chart and the 60-minute chart, and both have potential massive topping tails. We see the same topping tails across many sectors right now. Bernanke triggered an early push higher in the market with his usual dovish comments, but it seems after he said the words “on the other hand” [...]

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Iceland’s Post-Crisis Economy: A Myth or a Miracle?

Wed, 22 May 2013 14:15:47 -0400

Icelandic voters recently ejected its post-Crisis government – a government that successfully avoided economic collapse when the odds were stacked against it. The new government comprises the same parties that were originally responsible for the Crisis. What’s going on? This column argues that this switch is, in fact, logical given the outgoing government’s mishandling of [...]

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Bernanke Says No Change for Now

Wed, 22 May 2013 14:05:18 -0400

In testimony before Congress today, Bernanke explained why the Fed’s large-scale asset purchases are continuing. Inflation as measured by the CPI or PCE deflator has been about 1% over the last year, while the most recent report put the unemployment rate at 7.5%. Bernanke observed: With unemployment well above normal levels and inflation subdued, fostering [...]

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Mr. Musk’s Wild Ride-At Your Expense (9 figures in 1 quarter)

Wed, 22 May 2013 13:59:26 -0400

My main beef with Tesla Motors (NASDAQ:TSLA) is that it is a major beneficiary of government largesse masquerading as a free market success story. The company received a $450 million loan from the Federal government to set up operations. It has just paid back that loan, but does not justify granting the loan in the [...]

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Bernanke Vows To Keep The Peddle to The Metal

Wed, 22 May 2013 10:41:53 -0400

The Federal Reserve Chairman Ben Bernanke is beginning to testifying in front of the Joint Economic Committee. In his opening remarks, the head of the central bank has signaled that he shall continue to keep the current quantitative easing program in place. Traders and investors can easily see the decline in the U.S. Dollar Index [...]

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America’s New Growing Energy Security

Wed, 22 May 2013 09:48:37 -0400

Yes, dear reader, the U.S. holds a new strategic energy weapon. The U.S. shale gale, or fracking revolution, has begun liberating not only “trapped” hydrocarbons like oil and gas, but also a liberation of U.S. foreign policy. All of a sudden, the U.S. isn’t so beholden to events in faraway places filled with people we [...]

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And Then There is Bernanke

Wed, 22 May 2013 09:26:01 -0400

Lots of Fed chatter in the last week. For openers, some background from Reuters: It decided on May 1 to keep buying at an $85 billion monthly pace, and many economists say mixed economic data warrants keeping up the purchases through year-end. But persistent warnings from more hawkish Fed officials had fanned talk that it [...]

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Top Pre-Market Stocks Upgrades/Downgrades May 22, 2013

Wed, 22 May 2013 09:15:35 -0400

UPGRADES Chesapeake (NYSE:CHK) upgraded to Positive from Neutral at Susquehanna – Susquehanna upgraded Chesapeake based on increased oil and gas forecasts and re-branding initiatives by new CEO Doug Lawler. Price target raised to $26 from $23 Cree (NASDAQ:CREE) upgraded to Buy from Neutral at Sterne Agee Bristol-Myers (NYSE:BMY) upgraded to Buy from Neutral at Citigroup [...]

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Making Investment Grade Is Only the Beginning for Turkey

Tue, 21 May 2013 15:04:59 -0400

It’s been a few months since I was in Istanbul and wrote about Turkey’s exciting cultural and economic transformation, and the country is still making headlines. The Emerging Europe Fund’s (EUROX) portfolio manager, Tim Steinle, has been very bullish on Turkey for multiple reasons, including its young growing demographic, its fiscal and monetary policies geared [...]

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Bernanke KIKs the Can

Tue, 21 May 2013 14:51:02 -0400

In February, when Ben Bernanke gave his report to Congress, he spoke of his concern about “Excessive risk taking”. On May 10 he repeated his warning: very low interest rates, if maintained for a considerable time, could impair financial stability. For example, portfolio managers dissatisfied with low returns may “reach for yield” by taking on [...]

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Rand Paul Upsets Senate’s Apple (AAPL) Witch-Hunt

Tue, 21 May 2013 14:31:03 -0400

The Senate hearings on Apple’s (NASDAQ:AAPL) alleged manipulation of corporate tax laws have taken a rather unexpected turn. The usual political grandstanding even when it makes no logical sense has taken place, to wit John McCain’s comments: “Apple’s corporate tax strategy reflects a flawed corporate tax system that allows large multinational corporations to shift profits [...]

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Stock Options Watch: SKS, HLF, ABFS

Tue, 21 May 2013 13:55:17 -0400

(NYSE:SKS) - Saks, Inc. – High-end retailer, Saks, Inc., popped up on our ‘hot by options volume’ market scanner this morning on heavier than usual trading traffic in upside calls. Shares in Saks are up 10% on Tuesday morning at a new 52-week high of $13.54 after the company posted first-quarter earnings in line with analyst [...]

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Forget Stocks, It Is The Japanese Yen That Is Moving Markets

Tue, 21 May 2013 10:58:27 -0400

As we all know, almost every central bank in the world is printing money to boost exports and support asset prices in the stock market. To their credit, the money printing idea has worked as markets around the world have been rallying. Japan is now the most aggressive money printing country. The Bank of Japan [...]

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Stocks Continue Their Sharp Ascent

Tue, 21 May 2013 10:50:10 -0400

In what feels like the blink of an eye, the broad market is up nearly 17% in 2013… Look back to earlier this year. The boring stocks led us higher. Your mega-cap, super-safe, dividend-paying names were the stocks to own. These stodgy companies sprinted higher for weeks. Safe became the new speculative. Now, the rally [...]

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America’s New Energy Weapons

Tue, 21 May 2013 10:22:40 -0400

Last week I was in London attending the Platts Crude Oil Conference. In particular, much of the trip is geared toward energy and mineral issues, about which I write in my paid-up newsletters. Then again, I’ve spent time discussing the future of military technology with several people I know who follow these things from across [...]

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Stocks to Watch: BBRY, FB, CLF, BIDU

Tue, 21 May 2013 09:22:51 -0400

Research In Motion Ltd (NASDAQ:BBRY) The technical chart shows possibility of new rally as the stock bounced up after dropping back to EMA50. Further rebound is expected to test 15.55. If a break above this level occurs, price could eventually target the 16 region to the upside. Initial support is at 14.50, only a fall [...]

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Top Pre-Market Stocks Upgrades/Downgrades May 21, 2013

Tue, 21 May 2013 09:19:49 -0400

UPGRADES BlackRock (NYSE:BLK) upgraded to Outperform from Neutral at Macquarie -Price target raised to $315 from $253 IntercontinentalExchange (NYSE:ICE) upgraded to Outperform from Neutral at Macquarie – Price target raised to $207 from $153 DOWNGRADES First Republic Bank (NYSE:FRC) downgraded to Hold from Buy at Jefferies – Jefferies downgraded First Republic Bank with a $40 [...]

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Syria: Outside Patronage and a New Offensive for the Regime

Tue, 21 May 2013 08:10:50 -0400

The battle for the Syrian city of Al-Qusayr, which came under regime artillery fire May 19, is actually part of a larger battle for the highly coveted Homs governorate. As we noted in 2012, the battle has wide-reaching ramifications for the Syrian rebels since Al-Qusayr sits along a major transit point for rebel supplies and [...]

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Ergen Said to Bid $2 Billion for LightSquared Wireless Spectrum

Mon, 20 May 2013 16:27:21 -0400

Charlie Ergen, chairman of satellite-TV provider Dish Network Corp. (NASDAQ:DISH), made a $2 billion bid for spectrum from LightSquared Inc., the bankrupt wireless-broadband company owned by Philip Falcone’s hedge-fund firm, according to people familiar with the offer. Ergen, 60, has offered to buy the spectrum — the radio frequencies used for wireless communications — even [...]

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Stock Options Watch: VOYA, GRPN, SIGM

Mon, 20 May 2013 14:15:04 -0400

(NYSE:VOYA) – ING US, Inc. – Shares in ING Group’s U.S. retirement, investment and insurance business are up as much as 8.0% today to $26.98, the highest level since the company’s May 2nd IPO. ING US was rated new ‘buy’ at BTIG LLC with a 12-month target share price of $31.00 today. The stock has [...]

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Solar Stocks on Fire – FSLR, SCTY, JASO

Mon, 20 May 2013 13:17:37 -0400

The solar stocks continue to rip higher. Many of these plays are up well over 100% in just the last month. This is a case of shorts being in a crowded trade. In this market, that almost always ends in disaster. Understand a crowded trade and avoid it in this market. First, let’s talk about [...]

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Silver’s Next Leg Lower Starts Now

Mon, 20 May 2013 11:38:30 -0400

For a few short minutes Sunday evening, a bit of chaos roiled the futures markets. Silver tanked at the open, dropping as much as 8% to a low of $20.25 before recovering later in the evening. Price continues to fight higher this morning. As I type, silver is off by almost 3%, while gold is [...]

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Facebook (FB) Gets Defriended by the Market

Mon, 20 May 2013 11:10:03 -0400

This morning, the leading social networking stock in the world Facebook Inc (NASDAQ:FB) is coming under selling pressure again. This stock has been selling off since May 3, 2013, when it traded as high as $29.07 a share. Today, FB is trading lower by 0.38 cents to $25.87 a share. With this action in the [...]

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Equity Risk Premiums (ERP) and Stocks: Bullish or Bearish Indicator

Mon, 20 May 2013 11:02:29 -0400

If you have been following my blog postings, you are probably aware that I have an obsession with equity risk premiums (ERP), and have done an annual survey paper on the topic every year since 2008 (with the 2013 update here). I also post a monthly update for the ERP for the S&P 500 at the [...]

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Is Nuclear Winter Coming to the Senate this Summer?

Mon, 20 May 2013 10:14:49 -0400

It seems the Senate could have a really hot summer. Majority leader Harry Reid (D-NV) has reportedly threatened to “go nuclear” this July—meaning that Senate Democrats would move by majority vote to ban filibusters of executive and judicial branch nominees. According to these reports, if Senate Republicans block three key nominations (Richard Cordray to head [...]

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Fed-speak: Ease Air Out of Bonds – Support Equities

Mon, 20 May 2013 09:51:31 -0400

While the fundamentals of our underlying economy bump along with continued structural headwinds and fiscal support from Uncle Sam remaining anemic, the Federal Reserve’s QE-infinity remains the underlying cornerstone supporting our markets. With equities making new highs and high yield bonds trading at stratospheric levels, recent pronouncements from Fed officials strike me as looking to [...]

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America’s Future Early Education System

Mon, 20 May 2013 09:48:28 -0400

At some point, the United States is likely to have universal publicly-funded early education for children aged one to four. But while we led the way in establishing universal elementary and secondary schooling and in expanding access to college, on early education we lag well behind some other rich nations. We should pick up the [...]

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Top Pre-Market Stock Upgrades/Downgrades May 20, 2013

Mon, 20 May 2013 09:21:39 -0400

UPGRADES J.C. Penney (NYSE:JCP) upgraded to Buy from Hold at Maxim – Maxim upgraded J.C. Penney on expectations the company’s strategy changes under new CEO Mike Ullman will drive traffic. The firm said its recent channel checks indicate that store traffic has increased and it raised its price target for shares to $27 from $16.50 [...]

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The Lesson from Japan

Mon, 20 May 2013 09:12:11 -0400

Japan’s stock market is on a roll, largely because expectations have dramatically changed this year about the underlying state of macro for the planet’s third-largest economy. The iShares MSCI Japan Index ETF (EWJ) is up a potent 24% year-to-date. That’s a substantial premium over the 18% gain for US stocks SPDR S&P 500 (SPY), for [...]

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Japan’s QE is Exporting Deflation

Mon, 20 May 2013 09:00:33 -0400

Japan’s effort at super QE is likely to export its deflation to trading partners. John Mauldin has a long a analysis of this in his current newsletter. Our occasional guestblogger Yves comes to a similar conclusion. He wraps it into several conclusions: Stocks: his bullish indicator has turned Yellow – time to take profits. It [...]

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Yahoo (YHOO) Approves Billion-Dollar Tumblr Cash Deal

Mon, 20 May 2013 05:58:44 -0400

Yahoo (YHOO)’s board of directors has agreed to acquire popular social blogging platform Tumblr for $1.1 billion in cash, The New York Times reports. Details of the acquisition were first reported by AllThingsD on Thursday, which also cited the same cash figure. The deal, sealed at a meeting of Yahoo’s board, is expected to be [...]

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Sovereign Debt Concerns in 2013

Sun, 19 May 2013 18:27:14 -0400

Interest rates on government debt for a number of European countries– notably Greece, Portugal, Ireland, Italy, and Spain– shot up considerably during 2010-2012. Those yields have fallen significantly from their peaks, though these five countries still face higher borrowing costs than most other countries in Europe. Yields on long-term government bonds, Jan 2009 to April [...]

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Fiscal Prioritisation: Lessons from Three Wars

Sun, 19 May 2013 08:28:49 -0400

Can we learn from previous instances of fiscal prioritisation? This column surveys the US Treasury’s response to three wars – the Revolutionary War, The War of 1812 and the Civil War. Contemporary advocates of engaging in fiscal discrimination might ponder the actions of previous US Presidents Madison and Grant, who honoured all existing federal obligations [...]

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