Thursday, September 23, 2010

Totalinvestor Special Situation: UNX a 10 Bagger?

We originally took a look at UNX.V back on July 30, 2010 when the stock was trading around $1.70, and gave some good reasons why the stock offered a potential 1000% return for those who were patient and could afford the very high risk.
click here

So what has happened since?
The stock quickly jumped to $2.50, then the typical profit taking down to $2.10, and just recently it broke out to high of $3.00 on good volume. Everything seems to be right on track.
YES I am a shareholder and no, this should not be considered as investment advice.

Dow Jones Never Lose Trade, Profit Now. CLICK HERE.

Most Overbought Stocks in the S&P 500

At the open today, 313 of the 500 stocks in the S&P 500 were trading in overbought territory (more than 1 standard deviation above their 50-day moving averages). Below are the stocks in the index that are the most overbought. In the screen below, the right side of the dark red zone represents 3 standard deviations above the 50-day moving average, and many of these names are trading right at this level. Qwest Communications (Q) is the most overbought stock in the S&P 500 at the moment, trailed closely by Travelers (TRV), CenturyLink (CTL), Oracle (ORCL), Discovery Communication (DISCA), and Forest Labs (FRX). Apple (AAPL) is right up there as well. And big retail names like Kohl's (KSS), Wal-Mart (WMT), and Best Buy (BBY) are also on the most overbought list. All of these names have clearly had a nice run over the last couple of weeks, but at these levels it's tough to make an aggressive bet on the long side. It's probably worth waiting until they get a little closer to their normal trading ranges before putting on a long trade.

McAlvany Weekly Commentary

Markets Stalemate with Gold the Exception

David McAlvany will be speaking at the New Orleans Investment Confernce. Click here for more details

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They Are Printing Too Much Money,

There is too much money being printed. No rocket science is needed to reach that conclusion. The markets are giving us a clear message.

For example, gold is trading at a record high, while silver has reached a 30-year high. Those new high prices are happening for a reason. The precious metals are sensitive to changes in inflation, both actual as well as future expectations.

Rising precious metal prices tell us that there is a lot of inflation in the pipeline, but they are not alone in giving us this message. More generally, look at the trend in commodity prices over the past few months in the following chart of the CRB Continuing Commodity Index, which is based on the price of 19 different commodities. (more)

20th Consecutive Week Of Outflows,

Here are the facts: Beginning on May 5, there have been 20 consecutive outflows from domestic mutual equity funds. The average weekly outflow has been ($3.5) billion. Total outflows in this period are $70 billion. Total outflows YTD are $68 billion. The S&P on May 5, the day the series of outflows began, was 116.8. Today it closed at 113.5, a 2.8% decline despite almost $100 billion of runrated outflows. Furthermore, as we previously disclosed, YTD ETF flows through August into pure domestic equity-related strategies have been a negative $16.8 billion. In other words, the stock market is now virtually unchanged in 2010, even as almost $80 billion in equity-capital has been withdrawn.

Here is our question: how is this possible?

Weekly flows into domestic equity mutual funds: (more)

Top Five Reasons to Trust This Rally

By Elliot Turner

Everywhere I turn, people tell me that this rally is not to be trusted. We were hearing that from the first day of September as the market broke its August downtrend, and again Tuesday after the market broke the “important” 1130 level on the S&P. Complaints range from lack of volume, to over-bullishness which I just don’t get. Here are my five most important reasons to legitimately trust this rally:

1. In the long run, the market follows the trajectory of earnings

Whether one believes the market to be efficient or not is irrelevant. Take any subset of time and the above statement is predominantly true. In the latest earnings season, reports were outstanding; however, market prices declined due to concerns out of Europe and of a double-dip. The earnings run-up that carried us through July faded in August, but once again with earnings looming the market is on the rise.

Emerging markets have exhibited particularly impressive results while developed economies took a beating during the Spring and Summer trading sessions. Many US-based companies have significant exposure to earnings growth abroad, and this has provided an outstanding boost to earnings while the US has experienced a speed bump in the road to recovery. This source of earnings growth will continue into the foreseeable future. (more)

Uranium Prices at 10-Month High Attract Hedge Funds, Investors, UxC Says

Uranium is drawing interest from investors including hedge funds after prices for the nuclear fuel climbed to the highest level in more than 10 months, according to Ux Consulting Co.

Uranium-oxide concentrate for immediate delivery remained at $48 a pound for a third week, Roswell, Georgia-based UxC said yesterday in a report. Prices are up 19 percent from this year’s low in March.

Hedge funds also were in the uranium market six years ago, Jeff Combs, UxC’s president, said yesterday by phone. At that time, prices of the radioactive element were starting a surge in which they would jump more than fivefold in the three years through 2006. Uranium almost doubled again in 2007, reaching a record $136 a pound in June of that year.

“Interest from hedge funds and investors has started to re-emerge,” Combs said. “We did see it in 2004. Investors and hedge funds were getting interested, and they were ahead of the curve then. The question now is, is this the next up leg in the market?” (more)

ANDE Andersons Agriculture Stock Setting Up For 50 Dollar Price Target

Today ANDE – Andersons Inc. found its way into my portfolio. I chose ANDE for starters as it is a rather slow mover. The time will come to ramp up position sizes and trade more aggressive stocks. No need to rush things after a trading break.

ANDE looks interesting as it is part of the ‘Agriculture Investment Theme’ which is gaining traction. I mentioned ANDE along with corn and coffee in the past. As mentioned in the former post ANDE does have overhead resistance but as it is not in the immediate past it shouldn’t be too much of a problem. That being said volume needs to kick in soon in order for momentum to develop.

The potential 50 US$ price target for ANDE is much easier to identify on the weekly chart.

The target area is highlighted. Here’s a list of things I like about the chart:

* The price target is ‘only’ 20% away. If the stock starts to move the price area is more likely to act as a strong magnet.
* 50 USD is a round number. Stocks like to touch round numbers. The logical target for an uptrending 40 dollar stock is 50 US$
* Price is trading above the weekly MA 30.
* The weekly moving average 30 was flat and is now starting to move to the upside.
* Bullish ascending triangle chart pattern.
* Thrusting move into the triangle. From a technically perspective a break out is more likely to resume the trend leading into the pattern. The next thrusting move therefore should be up.
* Stop Loss is not too far away. Judging from the pattern pressure the stock should show its hand pretty soon. If I get stopped out losses will be small and I will probably know pretty soon.
* The Ag Sector as a whole is moving up. We therefore have a set-up where a ‘rising tide raises all ships’.

MoneySense – September/October 2010

MoneySense is the country’s most trusted source of information on investing, banking, RRSPs, insurance, financial planning, saving for education, home buying, real estate investing, car buying and much more.

read more here

$10 Oil? Mike Maloney Schools Bankers on Deflation (Part 1 of 2)

Stocks waver as traders move into Treasurys, gold

(AP) -- Traders put their September stock rally on hold and moved into Treasurys and gold Wednesday, a day after the Federal Reserve said it was ready to take more action to boost the economy.

The Dow Jones industrial average fell 21 points.

With no new economic data out Wednesday and the Fed's announcement late Tuesday having a bigger impact on the bond and currency markets, Bob Auer, portfolio manager of the Auer Growth Fund, said it was natural for stocks to pause.

Major indexes have soared this month as economic reports have consistently indicated the economy continues to grow, albeit slowly.

"People are saying, 'I've got some profits, let's book 'em,'" Auer said. Entering Wednesday, the Dow had risen 13 of the past 15 days and climbed 7.5 percent so far in September. (more)