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11-Mar-10
I remain in awe of the market. Despite a steady stream of news that is either poor or unremarkable, this market continues higher. Although we have not witnessed blockbuster, high-volume days that crush the bears, a steady climb has allowed prices to approach those of recent weeks.
Although I'm impressed with this performance, I still remain wary. At this time of year I begin poring over annual reports, and the picture is not pretty. In general, companies have strengthened their liquidity... [Read More]
Posted at 06:17 in Strategy | Permalink | Comments ()
10-Mar-10
Tuesday March 9 marked the one-year anniversary of the current stock market rally. During a 12-day span in 2009, the Dow Jones Industrial Average (Dow) lost over 1,000 points and closed at a bottom of 6,547. Since then, we have witnessed a relentless rally that has carried the Dow 61% higher in one year.
Looking back, everyone will describe how the market was oversold and the bottom in prices was predictable. However, when prices were cascading toward that low no such consensus existed. At the... [Read More]
Posted at 10:55 in Market Report | Permalink | Comments ()
02-Mar-10
While an earlier article marveled at the market's ability to rally on poor news, this week continues testing this pattern. On a week scattered with earnings announcements, the economy retains center stage. The talking heads can spend countless hours discussing durable goods and leading indicators, but those items speak more to statistical recovery than to sustainable growth. Cutting through the noise, the economy will finally grow robustly when jobs are created. When this occurs, loan defaults... [Read More]
Posted at 13:01 in Market Report | Permalink | Comments ()
01-Mar-10
It is always rewarding when the markets confirm your point of view. By positioning based upon your research, such affirmation makes prices move in our favor and delivers strong gains to subscribers of my weekly newsletter EPIC Insights.
An example is my short position in the CurrencyShares British Pound Sterling Trust (FXB), a proxy for the British pound. As the euro-zone remains engulfed by unfolding drama, the U.S. dollar (USD) has now finished higher nine of the past 13 weeks. While investors... [Read More]
Tagged Stocks: FXB
Posted at 11:45 in Market Report | Permalink | Comments ()
Considering that the Dow Jones Industrial Average (Dow) fell 0.7% last week, remains 3.7% below the peak it reached on January 19, and none of the 14 international indices I track have been able to climb above the 2010 highs reached in mid-January, the following comment may appear strange, but I am very impressed with the recent resilience. If we had had no knowledge of how prices had moved over the past two weeks and had focused solely on the news flow, we would have been gripped by despair.... [Read More]
Posted at 07:28 in Market Report | Permalink | Comments ()
25-Feb-10
An allure of the option market is the ability to craft trades with quantifiable, limited downside risk and large potential gains. Whether we're purchasing one contract or multiple positions, option markets offer great flexibility.
As Crocs's (CROX) earnings announcement approaches, I will use such flexibility to our advantage. In my weekly newsletter EPIC Insights, I have recommended a long position in CROX that has delivered an 11% gain. The stock has been following a steady uptrend, and I... [Read More]
Tagged Stocks: CROX
Posted at 11:25 in Strategy | Permalink | Comments ()
24-Feb-10
On occasion, the simplest ideas are the most effective. When I sent last Thursday's bonus article to subscribers of my weekly newsletter EPIC Insights I focused on Cliff Natural Resources (CLF). With a trailing P/E of 33, a forward P/E of 13, and a dividend yield of 0.66%, the stock was fairly valued and from a fundamental perspective did not offer a compelling reason to either own or be short the stock. Technical analysis led to the same conclusion: after breaking a long-standing uptrend (black... [Read More]
Tagged Stocks: CLF
Posted at 10:21 in Market Report | Permalink | Comments ()
16-Feb-10
As a value investor, I am dependent upon the market. After determining what I believe to be a company's fair value, I must wait for the market to allow me to purchase the shares below that price. Often times, this involves stepping into a stock after everyone else has left. Such an approach is often lonely, but profitable as well.
A recent example is the recommendation I made in the January 31 issue of my weekly newsletter EPIC Insights. At that time, Motorola (MOT) had recently reported... [Read More]
Tagged Stocks: MOT
Posted at 12:16 in Market Report | Permalink | Comments ()
07-Feb-10
I rarely watch CNBC. With a format that relies upon constant analysis throughout the trading day, the network tends to make mountains out of molehills. The majority of the time, set agendas dominate careful analysis and irrelevant items gain great prominence as each expert attempts to explain every change in stock price and pontificate upon every minor market move.
These words may be harsh, but they are not intended to be an indictment upon the network as a whole. When it comes to major events,... [Read More]
Posted at 17:18 in Market Report | Permalink | Comments ()
03-Feb-10
As first outlined in my weekly newsletter EPIC Insights, all eyes will be on the monthly employment report third Friday. The ADP report had a loss of 22,000 jobs for January making it the smallest drop since February 2008. This has encouraged the bulls to forecast that January will show job growth with 15,000 jobs being added and the unemployment rate holding steady at 10%.
With an economy so large, a swing to 15,000 jobs created is statistically insignificant, but would be a welcome break in... [Read More]
Posted at 17:03 in Market Report | Permalink | Comments ()
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