Friday, September 14, 2012

Gold hits 6 month highs on Fed’s new QE announcement

The yellow metal jumped sharply after the U.S. central bank tied its aggressive stimulus programme directly to economic conditions, marking a significant shift in US monetary policy direction.

by Frank Tang,

Gold jumped to a six-month high near $1,770 an ounce on Thursday, rising 2 percent after the U.S. Federal Reserve launched an aggressive stimulus program and vowed it will keep buying assets until the outlook for jobs improves substantially.

The metal received a huge boost after the U.S. central bank tied its unconventional bond-buying directly to economic conditions, marking a significant shift in the direction of U.S. monetary policy.

Market watchers said the Fed was essentially shifting its focus to maximum employment at the expense of maintaining stable prices. The two objectives are often called the Fed’s dual mandate.

Read More @

This Breakout Stock is a Strong 'Buy' Today: COSTCO

Shoppers and shareholders alike have reason to love this big-box retailer. The no-frills superstore offers its customers deeply discounted prices and rewards traders with a steadily increasing share price.

The stock is up about 28% in the past year, and may be on the verge of a significant technical breakout. On Thursday, shares hit a new all-time high near $100. And the stock looks poised to soar further, presenting a potentially profitable trading opportunity -- for those who act quickly.

Costco (NASDAQ: COST) operates membership warehouses that offer a wide assortment of products at bargain-basement prices. Helping drive growth is rampant consumer hunger for high-quality, low-cost goods.

By selling out of a bare-bones warehouse space, and purchasing products in enormous bulk quantity, the company can afford to pass huge savings on to customers. Whereas the average big-box retailer takes a 20% to 30% margin, Costco's cut is only about 10%. But what it loses in margin, it makes up for in sales volume. In fiscal year 2011, Costco's average sales volume per store was $146 million, up 5% from a year earlier.

The majority of Costco stores are located in the United States; however, the superstore operates in 80 other countries, making it the ninth largest retailer on the planet. This year, the company plans to expand into Korea and Taiwan, bringing its total store count up to 608.

Technical Outlook: Stock on the Verge of Bullish Breakout

During the past two years, Costco has been in a major uptrend. In May, shares began forming an accelerated uptrend line. The stock has been dynamite ever since. In early June, shares broke through old resistance, which has become new support, near $91.50. In doing so, the stock bullishly completed a small ascending triangle formation.

Continuing to move up, shares hit resistance near $98.22. For much of July and August, the stock was capped at this level. However, during the Aug. 27 trading week, the stock managed to poke its head above resistance, rising to an all-time high of $99.28.

On Thursday, shares hit a new all-time high at $99.99, breaking nearby resistance. In doing so, a second consecutive ascending triangle was completed. This is a highly bullish occurrence. As long as the stock can retain momentum, it could soar much higher.
According to the measuring principle for a triangle -- adding the height of the triangle to the breakout level -- shares could easily reach a new all-time new high of $104.91 ($98.22-$91.53=$6.69; $6.69+$98.22=$104.91). That is 5% above Thursday's close. But with no overhead resistance in sight, the stock could easily soar much higher.

COST Chart

Fundamental Outlook: Strong Revenue and Earnings Growth Potential

The bullish technical outlook is supported by strong fundamentals. Costco reported better-than-expected August same-store sales. This important metric of retail growth came in at 6% (excluding currency conversion and higher gasoline costs). This was well above the 4.5% projected by analysts.

In late May, the company announced upbeat third-quarter results. Due to strong consumer demand, third-quarter revenue increased 8% to $22.3 billion, from $20.6 billion in the comparable year-ago period.

For the upcoming fourth-quarter, scheduled to be reported Oct. 11, analysts project revenue will increase 12.1% to $31.6 billion, from $28.2 billion in the year-ago quarter. For the full 2012 year, analysts expect revenue to ramp up 10.7% to $98.4 billion, from $88.9 billion last year.

The earnings outlook is equally strong. In the most recently reported third quarter, earnings increased 21% to 88 cents, from 73 cents in the comparable year-ago period. Strong sales volumes combined with a 9% increase in membership fees contributed to the gain.

For the upcoming fourth-quarter, analysts' project earnings will rise 20% to $1.30, from $1.08 in the same period a year ago. With nearly 90% of customers renewing their memberships each year, analysts project Costco's full-year 2012 earnings will grow 17% to $3.87, from $3.30 last year.

Risks to Consider

High food and commodity costs, caused by inclement weather this summer may mean Costco will have to raise its prices. This could potentially cause a backlash from angry consumers who are used to paying bottom dollar. However, because Costco's margins are so low compared to its competitors, consumers are unlikely to find cheaper prices elsewhere and will likely stick to shopping at the bustling big-box retailer.

Nick Barisheff – Gold Is Really Going To $10,000 Per Ounce

from FinancialSurvivalNet

Gold didn’t spke today because there’s a run on high end jewelry. Rather, it went up because the dollar got dramatically weaker. The Fed’s QE3 is the reason. Its part of an irreversible trend, including the aging and retiring baby boomers, less availability of inexpensive recoverable oil and the declining employment trend. Taken together this means that inflation and gold are going way up. Nick believes that the only defense against this massive wealth destruction event is buying gold and silver. You can find Nick at

Click Here to Listen to the Audio

McKesson Corporation (NYSE: MCK)

A Head and Shoulders (H&S) pattern is a reversal pattern that forms after an uptrend. A textbook H&S pattern starts to form when a stock rallies to a point and then pulls back to a particular level (shoulder #1). Next, the stock will rally again, but this time to a higher peak (head) than the previous shoulder. After forming the head, the stock will pull back to the same support as the first shoulder did. Finally, the stock rallies a 3rd time, but not as high as the head (shoulder #2). The level that has been created by all 3 of the pullbacks is simply a support level referred to as the "neckline". The formation of an H&S pattern warns of a potential reversal of the uptrend into a possible downtrend.

McKesson Corporation, together with its subsidiaries, delivers pharmaceuticals, medical supplies, and health care information technologies to the healthcare industry primarily in the United States. It operates in two segments, McKesson Distribution Solutions and McKesson Technology Solutions. The McKesson Distribution Solutions segment distributes ethical and proprietary drugs, medical-surgical supplies and equipment, and health and beauty care products in North America. This segment also provides specialty pharmaceutical solutions for biotech and pharmaceutical manufacturers. In addition, this segment sells financial, operational, and clinical solutions for retail, hospital, and alternate site pharmacies. The McKesson Technology Solutions segment delivers enterprise-wide clinical, patient care, financial, supply chain, and strategic management software solutions, as well as pharmacy automation solutions for hospitals. This segment also includes Payer group of businesses, which include InterQual clinical criteria solution, medical management tools, claims payment solutions, network performance tools, and care management programs.

To review the H&S pattern that has formed on McKesson's stock, please take a look at the 1-year chart of MCK (McKesson Corporation) below with my added notations:

1-year chart of MCK (McKesson Corporation)

MCK has been rallying nicely since October of last year. Over the last (6) months though, MCK has created a very important level at $86 (navy), which would also be the "neckline" support for the H&S pattern. Above the neckline you will notice the H&S pattern itself (red). In order to confirm the H&S pattern, MCK would need to break the $86 support.

Keep in mind that simple is usually better. Had I never pointed out this H&S pattern, one would still think this stock is moving lower simply if it broke below the $86 support level. In short, whether you noticed the pattern or not, the trade would still be the same: On the break below the key $86 level.

10 Quality Dividend Stocks Trading Below Their Fair Value

One of the most asked questions I get is, 'When should I start investing?' The implication is that now is not a good time. Either the market is too high after the recent run up, or the market is too scary after the recent declines. There are always reasons for not investing today. What's the secret to picking the right time to start investing?

If you are a trader, peaks and troughs are very important. You want to sell at the peak and buy back into the market at the bottom and wait for the next peak. The problem is peaks and troughs are much easier to identify in hindsight. An alternative to this market timing approach is a long-term buy-and-hold strategy that focus on dividend growth stocks selected using a value oriented approach.

It seems you can always find stocks trading at a discount to their calculated fair value. Bad news about good companies is a bargain hunters best friend. The beauty of an income focused long-term, buy-and-hold strategy is the future declines are not necessarily a bad thing. This allows you to buy more shares at a lower price which in turn will provide you with a higher yield.

This week week, I screened my dividend growth stocks database for companies that are:

- Trading below their calculated fair value
- Yield is greater than 2.5%
- EPS is greater than $0
- Free Cash Flow Payout is between 0 and 70%
- Debt to total capital is less than 50%

Below are the results presented here in ascending rank based on yield:

Microsoft (MSFT), the world's largest software company, develops PC software, including the Windows operating system and the Office application suite. The company has paid a cash dividend to shareholders every year since 2003 and has increased its dividend payments for 9 consecutive years.
Fair Value: $38.29 | Yield: 2.7% (more)

Gold, Systemic Collapse & The End Of Fiat Money

from KingWorldNews:

Today world renowned money manager Felix Zulauf warned King World News, “… the fiat currency, paper currency standard, is in the final stage of the super cycle.” Zulauf, who founded Zulauf Asset Management, also declared, “I do believe the 30 year bull market in government bonds is over.”

Zulauf was also bullish on gold: “… from now on buying the dips is the right strategy because I think we have actually entered the next cyclical bull market within the secular bull run that we are still in.”

Zulauf also said stocks would plunge, but first, here is what Felix had to say about systemic collapse: “The global banking system, particularly in the industrialized world, is still highly undercapitalized. That’s the big problem. So if anything goes wrong, bank balance sheets are highly leveraged and you have a problem. The central banks were running behind the curve.

Zulauf continues @

Marriott International, Inc. (NYSE: MAR)

When it comes a stock hitting a 52-week high, I prefer to look for ones hitting a "new" high. In my view, that would be a stock that hasn't hit a new 52-week high in quite some time, and more importantly, I want the stock to have broken through a key area of resistance. This way I know that it wasn't just any move higher, it was an important breakout.

Marriott International, Inc. operates, franchises, and licenses hotels and corporate housing properties worldwide. The company operates and franchises hotels and resorts under various brands, including Marriott Hotels & Resorts, JW Marriott, Renaissance Hotels, Autograph Collection, Courtyard, Fairfield Inn & Suites, SpringHill Suites, Residence Inn, TownePlace Suites, The Ritz-Carlton, Bulgari Hotels & Resorts, and EDITION, as well as AC Hotels by Marriott. It also licenses the development, operation, marketing, and sale of vacation ownership properties under the Marriott Vacation Club, Grand Residences by Marriott, Ritz-Carlton Destination Club, and Ritz-Carlton Residences brands to the Marriott Vacations Worldwide Corporation. In addition, the company operates Marriott Executive Apartments that provide temporary housing for business executives; and Marriott conference centers. As of December 30, 2011, it operated, franchised, or licensed 3,718 lodging properties with 643,196 rooms that include 32 home and condominium products with 3,838 units, as well as provided 2,166 furnished corporate housing rental units. The company was founded in 1971 and is headquartered in Bethesda, Maryland.

To review Marrott's stock, please take a look at the 1-year chart of MAR (Marriott International, Inc.) below with my added notations:

1-year chart of MAR (Marriott International, Inc.)

After moving higher from October of last year, MAR has stalled since April while running into a $40 resistance (red). The $40 level is a clear resistance level that would signify an important 52-week high breakout if the stock could manage to break above it. IF that were to happen, the stock should probably be heading higher overall.